Monthly Archives: September 2008

08ASTANA1910, KAZAKHSTAN: GOVERNMENT TO PRESENT DRAFT OF NEW SUBSOIL LAW

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Reference ID Created Released Classification Origin
08ASTANA1910 2008-09-29 12:43 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3896
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1910/01 2731243
ZNR UUUUU ZZH
O 291243Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3442
INFO RUCNCIS/CIS COLLECTIVE 0652
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEKJCS/SECDEF WASHDC 0122
RUEKJCS/JOINT STAFF WASHDC
RHEHNSC/NSC WASHDC 0204
RUEAIIA/CIA WASHDC
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 001910 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TDA FOR DAN STEIN 
COMMERCE FOR DANICA STARKS, ENERGY FOR TYLER TILLER 
 
E.O. 12958: N/A 
TAGS: EPET EINV PGOV KZ
SUBJECT:  KAZAKHSTAN: GOVERNMENT TO PRESENT DRAFT OF NEW SUBSOIL LAW 
TO PARLIAMENT 
 
SUMMARY 
 
1. (SBU) The Government of Kazakhstan will present to Parliament in 
October a draft of a new law on subsoil use.  The proposed 
legislation would require separate contracts for exploration and 
production operations, put shorter time limits on exploration 
contracts, enhance the government's authority to terminate contracts 
not in compliance with the law, and require tax stability clauses in 
individual contracts to be approved by parliament.  In addition, 
under the terms of the legislation, no future contracts would be 
structured as production sharing agreements (PSAs).  A Ministry of 
Energy official explained to us that the new legislation is aimed at 
ironing out "contradictions" in several existing laws. International 
oil companies are concerned with several of the provisions in the 
proposed legislation -- but there does not appear to be the same 
level of anxiety that was manifested over the October 2007 subsoil 
amendments.  END SUMMARY. 
 
NO NEW PRODUCTION SHARING AGREEMENTS 
 
2. (U) The Ministry of Energy and Mineral Resources announced on 
September 8 that it will present to Parliament in October a draft of 
a new law "On Subsoil and Subsoil Use."  If passed on schedule, the 
Ministry expects that the new law would come into effect in January 
2009.  The existing subsoil law has been amended five times, most 
recently in October 2007.  The new law would supersede all current 
legislation on oil production and exploration, mineral resources 
mineral management, and production sharing agreements (PSAs). 
 
3. (U) Under the government's proposed draft, no future subsoil use 
contracts would be structured as PSAs.  Tax stability clauses in 
contracts would still be permitted, but parliament would have to 
ratify them to make them legally valid.  There would be separate 
bidding procedures and contracts for exploration and production 
operations.  A company awarded exploration rights would nevertheless 
be given priority rights to negotiate a production contract with the 
government following an oil or gas discovery.  However, if the terms 
of the production contract were not agreed to within a set time 
period, production rights would be opened to other bidders through a 
public tender. 
 
MORE AUTHORITY TO TERMINATE CONTRACTS 
 
4. (U) Under other terms of the draft law, exploration contracts 
would be limited to six years, with the possibility for an extension 
for an evaluation period.  (NOTE: Current law provides for 
exploration contracts of up to six years, with the possibility of 
two extensions of two years each -- for a total of 10 years -- in 
addition to an additional extension for an evaluation period. END 
NOTE.) Companies would be required to establish equal terms, 
conditions, and pay for Kazakhstani and foreign workers. The 
government would also put greater emphasis on promised social 
contributions in evaluating bids on subsoil contracts. 
 
5. (U) The proposed draft fully incorporates the October 2007 
amendment to the current subsoil law which allows the government to 
force amendments to existing subsoil contracts of "strategic 
significance" -- or even terminate such contracts -- where the 
economic interests of Kazakhstan are so threatened as to create a 
"national security risk."  In addition, the proposed draft provides 
the government with enhanced authority to terminate any subsoil 
contracts for non-compliance with any law.  The Ministry of Finance 
in particular pushed for such authority.  According to the Ministry, 
more than half of the 400 oil and gas companies operating in 
Kazakhstan do not consistently fulfill the terms of their contracts, 
especially those concerning taxation. 
 
REASSURANCES FROM ENERGY MINISTRY 
 
6. (SBU) Timur Toktabayev, Director of the Department of Subsoil 
Investment in the Ministry of Energy and Mineral Resources, told 
Energy Officer on September 24, that the main purpose of the new law 
was to codify and reconcile existing legislation.  Toktabayev served 
on the working group that prepared the new draft subsoil law and he 
claimed there were more than 60 contradictions in the various 
existing laws pertaining to subsoil.  The inter-governmental working 
group was also tasked with strengthening the monitoring and 
enforcement provisions of production contracts, particularly 
financial and technical clauses.  For example, production contracts 
 
ASTANA 00001910  002 OF 002 
 
 
will be monitored more closely to ensure that companies meet 
specific production milestones for the entire block under contract 
and do not simply hold subsoil use licenses without working to 
develop the field.  Toktabayev was eager to reassure Energy Officer 
that
 the Government of Kazakhstan will continue to respect the 
sanctity of contracts and the principle of tax stability.  He said 
the government does not want to trigger new legal battles with 
companies and will continue to prefer the negotiated settlement of 
disputes to litigation and arbitration. 
 
INTERNATIONAL COMPANIES EXPRESS SEVERAL CONCERNS 
 
7. (SBU) International oil companies operating in Kazakhstan, 
including ExxonMobil, ConocoPhillips, and Chevron, are currently 
reviewing the draft law and will provide comments and suggestions to 
the Government through the KazEnergy business association headed by 
President Nazarabayev's son-in-law, Timur Kulibayev.  They have 
indicated to us that their primary areas of concern are the 
separation of exploration and production contracts; the requirement 
for parliamentary approval of tax stability clauses; uncertainty 
over whether the provisions of the new law would require the 
renegotiation of existing contracts; and the government's enhanced 
authority to terminate contracts.  They also maintain that the 
legislation might allow the government to revoke the production 
rights of one company in a consortium while allowing other partners 
to continue to operate, thus giving the government direct influence 
over consortium operations and composition. 
 
COMMENT 
 
8. (SBU) The proposed new subsoil law appears to be yet another step 
-- even if a small one -- in the direction of increased Kazakhstani 
government assertiveness in the energy sector.  That said, while 
senior officials, including Prime Minister Masimov, admit that the 
government wants to strike more favorable terms for new deals, they 
regularly reassure us that the sanctity of existing contracts will 
be respected.  In any event, the proposed new law has not aroused 
anywhere near the same level of concern as the October 2007 subsoil 
amendments that gave the government the power to renegotiate and 
terminate contracts on "national security" grounds. END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA1873, KAZAKHSTAN – RELIGION LAW AMENDMENTS PASS

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Reference ID Created Released Classification Origin
08ASTANA1873 2008-09-25 11:50 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO1476
OO RUEHAST RUEHFL RUEHLA RUEHMRE RUEHPOD RUEHROV RUEHSR
DE RUEHTA #1873 2691150
ZNR UUUUU ZZH
O 251150Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3401
INFO RUCNOSC/OSCE POST COLLECTIVE

UNCLAS ASTANA 001873 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM KIRF PGOV KZ
SUBJECT: KAZAKHSTAN - RELIGION LAW AMENDMENTS PASS 
MAZHILIS, HEAD FOR SENATE 
 
REF: ASTANA 1850 
 
1.  (U) On September 24, the Mazhilis -- the lower house of 
parliament -- passed at a second reading a package of 
amendments to Kazakhstan's religion law.  There were no 
significant changes made to the legislation during the 
reading.  The bill will now move to the Senate for 
consideration, although it is not yet clear when the Senate 
will begin discussing it.  If the Senate approves the 
legislation with no changes, it will go to President 
Nazarbayev, who can sign it into law or veto it. 
 
2. (SBU) Comment:  Key NGO leaders told us previously that 
they view the current text of the legislation as "deficient" 
and an "infringement on religious freedom."  They plan to 
lobby the Senate and, if necessary, the Presidential 
Administration, with the hope of stopping it.  We will work 
with like-minded OSCE partners in urging the Senate to fully 
take into account ODIHR's recommendations as it reviews the 
legislation.  End Comment. 
 
MILAS

Wikileaks

08ASTANA1872, KAZAKHSTAN – CRIMINAL CASE OPENED UP AGAINST KEY

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Reference ID Created Released Classification Origin
08ASTANA1872 2008-09-25 11:13 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO1449
OO RUEHFL RUEHLA RUEHMRE RUEHROV RUEHSR
DE RUEHTA #1872/01 2691113
ZNY CCCCC ZZH
O 251113Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3399
INFO RUCNOSC/OSCE POST COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001872 
 
SIPDIS 
 
E.O. 12958: DECL: 09/25/2018 
TAGS: PGOV PHUM KDEM KCRM KZ
SUBJECT: KAZAKHSTAN - CRIMINAL CASE OPENED UP AGAINST KEY 
OPPOSITION LEADERS 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
------- 
SUMMARY 
------- 
 
1. (SBU) The Ministry of Internal Affairs announced on 
September 24 that it has opened a criminal case against 
several key opposition figures -- Azat's Bulat Abilov, OSDP's 
Amirzhan Kosanov, Alga's Vladimir Kozlov, and the Shanyrak 
movement's Asylbek Kozhakhmetov -- for allegedly concealing 
the whereabouts of a suspect in a murder investigation.  The 
suspect is Yesentay Baysakov, a Pavlodar businessman and 
erstwhile member of the Democratic Choice of Kazakhstan (DVK) 
who is accused of masterminding the murder of a business 
competitor in 2001.  He currently resides in Ukraine as a 
political refugee, a status he apparently received with the 
help of support letters from Kazakhstan's opposition leaders. 
 Kazakhstani law enforcement authorities are now accusing the 
oppositionists of willfully concealing Baysakov's whereabouts 
and aiding his escape from justice.  The opposition leaders 
call the case "groundless and politically motivated" and 
claim to have had no advance knowledge that Baysakov was 
under investigation.  Privately, all stress that they do not 
know Baysakov well and that the letters were sent on behalf 
of several individuals, not just him.  Other figures in the 
opposition camp give little credence to the criminal case and 
see it as an attempt to handicap the opposition. 
 
------------ 
TANGLED CASE 
------------ 
 
2.  (SBU) On September 24, the Ministry of Internal Affairs 
(MVD) opened a criminal case against several key opposition 
leaders for allegedly concealing and abetting a suspect in a 
serious crime.  The accused are Azat party chair Bulat 
Abilov, OSDP deputy head Amirzhan Kosanov, Alga party leader 
Vladimir Kozlov, and Shanyrak movement head (and former Alga 
leader) Asykbek Kozhakhmetov.  The case against them is a 
tangled and complicated story that revolves around a 
heretofore largely unknown personality, Yesentay Baysakov, 
who was apparently previously involved to the Democratic 
Choice of Kazakhstan (DVK), the party started by Abilov and 
Galymzhan Zhakiyanov in 2001.  In 2003, at the time of the 
launch of the corruption case against Zhakiyanov that 
eventually landed him in prison, Baysakov and several others 
connected to DVK fled the country and asked for political 
asylum in Ukraine.  The opposition leaders currently under 
investigation subsequently signed two letters in support of 
their asylum petitions.  Law enforcement authorities now 
claim that Baysakov was involved in the high-profile 2001 
murder of a Pavlodar businessman, Boris Kostanov.  Baysakov 
allegedly ordered Kostanov's murder after a failed attempt to 
take over his chemical business.  The authorities' case 
against the opposition leaders is that they willfully 
concealed Baysakov's whereabouts and aided his escape by 
supporting his asylum application.  Kazakhstan requested 
Baysakov's extradition this year, but Ukrainian authorities 
refused the request on the basis of his protected status. 
The opposition leaders' two letters were apparently part of 
the package of documents Ukraine sent back to Kazakhstan in 
support of the refusal to extradite. 
 
------------------------------------ 
ACCUSATIONS OF POLITICAL PERSECUTION 
------------------------------------ 
 
3.  (SBU)  The opposition leaders are denying any wrong-doing 
and accusing the authorities of "political persecution."  In 
a press release, Abilov, Kosanov, and Kozhahmetov called the 
case against them "groundless and politically motivated." 
They do not deny signing the two letters, but maintain that 
the letters were on behalf of several Zhakiyanov associates, 
not just Baysakov, and that this was done at the time of the 
"complete persecution of opposition leaders and activists" in 
Kazakhstan.  The opposition leaders further claim that they 
had no idea that Baysakov was under investigation.  They 
accuse the authorities of "waging yet another campaign to 
discredit the opposition" and using this case to detract 
attention from the "slew of corruption scandals" plaguing the 
government.  They further maintain that this is an attempt by 
the authorities to exclude the opposition from future 
elections.  (Note:  If convicted, the opposition leaders 
would not be able to stand for election until the conclusion 
of their sentences.  There are, however, no national 
elections scheduled until 2012, when both parliamentary and 
presidential elections should be conducted.  In his September 
2 speech opening the latest session of parliament, President 
Nazarbayev said there was no reason to hold early 
parliamentary elections.  End Note.) 
 
 
ASTANA 00001872  002 OF 002 
 
 
------------------------------------------- 
OPPOSITIONISTS DENY LINKS TO MURDER SUSPECT 
------------------------------------------- 
 
4.  (SBU) While presenting a united public front to the 
media, privately, the four oppositionists are trying to 
distance themselves from Baysakov and the 2001 murder case. 
Abilov, Kosanov, and Kozhak
hmetov stressed in conversations 
with us that they signed numerous letters on behalf of 
Zhakiyanov's associates living in Ukraine and that they did 
this on the personal request of Zhakiyanov's close friend, 
Tolen Tokhtasynov, a current deputy head of Kazakhstan's 
Communist Party who appears to reside outside of the country. 
 Kozlov maintained that he never signed any letters on behalf 
of Baysakov.  Both Kozlov and Kosanov underlined that they 
never met Baysakov, and Abilov and Kozhakhmetov said they met 
him only briefly, during a 2004 trip to Ukraine.  All claim 
that they did not know that Baysakov was sought by the 
authorities.  (Note: While it is certainly feasible that 
Baysakov's name could have gone unnoticed on the letters in 
support of his asylum claim, it is perhaps less plausible 
that none of the opposition leaders were aware up until now 
of his alleged involvement in the murder.  We uncovered 
several Kazakhstani press articles from before Baysakov fled 
Kazakhstan in 2003 fingering him as a suspect in the crime. 
End Note.) 
 
5.  (SBU) Other key figures in the opposition camp give 
little credence to the charges and see the case as an attempt 
by the authorities to handicap the opposition.  Socialist 
Resistance movement head Aynur Kurmanov endorsed the idea 
that the government wants to exclude the opposition leaders 
from future elections.  Azat deputy head Peter Svoik called 
the charges a red herring, aimed at distracting the public 
from the worsening economic situation, internal battles 
within the ruling elite, and the continuous swipes from 
ex-Nazarbayev son-in-law Rakhat Aliyev.  Opposition 
journalist Sergey Duvanov argued to us that the whole case is 
completely fabricated.  "The opposition leaders don't even 
know who this guy is," he contended. 
 
------- 
COMMENT 
------- 
 
6. (C) The case against the opposition leaders has come out 
of the blue.  At this early juncture, the government's 
motivations are difficult to decipher.  The move appears to 
be inconsistent with Kazakhstan's domestic political 
realities -- and, should the cases lead to actual 
indictments, can only sully the country's international image 
as its 2010 OSCE chairmanship approaches.  The opposition is 
fractured and marginalized, posing no threat to the 
government, and no elections are mandated for four more 
years.  In addition, there appeared to have recently been a 
thaw in government-opposition relations.  Nazarbayev held 
separate private meetings with Bulat Abilov and OSDP head 
Zharmakhan Tukaybay in the Spring, after which there was 
rampant speculation they were cutting a deal on early 
parliamentary elections that would lead to limited opposition 
seats in parliament.  While opposition leaders have 
criticized the government's handling of the Rakhat Aliyev 
case, their demands that Aliyev be brought to justice in 
Kazakhstan and opposition press exposes of his wrongdoing 
largely fit hand-in-glove with the government's own 
anti-Aliyev efforts.  Nazarbayev's categorical rejection of 
early elections in his September 2 speech to parliament 
caught may have signaled a change in course, but nevertheless 
there had been no hints of any preparations to go after the 
opposition.  End Comment. 
MILAS

Wikileaks

08ASTANA1870, KAZAKHSTAN – DECISION NOT TO INVEST IN BATUMI REFINERY

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Reference ID Created Released Classification Origin
08ASTANA1870 2008-09-25 10:57 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1422
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1870 2691057
ZNR UUUUU ZZH
O 251057Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3397
INFO RUCNCIS/CIS COLLECTIVE 0650
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS ASTANA 001870 
 
SENSITIVE 
SIPDIS 
 
EEB FOR SPECIAL ENVOY BOYDEN GRAY AND AMBASSADOR STEVEN MANN 
 
E.O. 12958: N/A 
TAGS: EPET EINV PGOV KZ GG
SUBJECT:  KAZAKHSTAN - DECISION NOT TO INVEST IN BATUMI REFINERY 
MADE WELL BEFORE GEORGIA CONFLICT 
 
1. (SBU) Energy Officer spoke on September 25 to Nurlan Sauranbayev, 
Managing Director of Oil Transportation at KazMunaiGas (KMG), about 
press reports that KMG has abandoned plans to invest $1 billion in 
an oil refinery in the Georgian port city of Batumi.  Sauranbayev 
confirmed that KMG decided not to make the investment, but said the 
decision was made well before the August conflict in Georgia and was 
made entirely for economic reasons. 
 
2. (SBU) Sauranbayev strenuously denied the implication that 
Kazakhstan was pulling its investments out of Georgia.  On the 
contrary, he emphasized that the Batumi oil terminal is a strategic 
asset of KMG and is an "essential element" of Kazakhstan's 
multi-vector transportation policy, in particular maintenance of the 
Eurasian corridor.  In fact, Sauranbayev said that he had just met 
with representatives of Chevron and was planning to meet later in 
the day with representatives of ExxonMobil to discuss expansion of 
oil shipments from Atyrau to Baku and onward to Batumi. 
 
3. (SBU) According to Sauranbayev, development of the feasibility 
study for a new Batumi refinery was suspended long before the crisis 
erupted in the Caucasus.  In 2007, KMG sent a team of engineers to 
Batumi to assess the feasibility of either renovating the existing 
refinery or building a new (green field) refinery.  Ultimately, KMG 
determined that neither project was commercially viable because the 
existing refinery did not meet minimum technical specifications and 
a new refinery would require a larger plot of land at a greater 
distance from residential housing and the sea than would be possible 
at the site. 
 
4. (U) In August 1999, UK-based holding company Greenoak Group paid 
$27.1 million for an oil transshipment facility on an 80-hectare lot 
near the port of Batumi in a privatization transaction with the 
Georgian government. Greenoak Group subsequently invested more than 
$60 million over three years to upgrade terminal facilities. In 
December 2006, Greenoak Group subsidiary Naftrans and KMG subsidiary 
KazTransOil formed a joint venture called Batumi Terminals JV in 
order to secure future volumes for the Batumi terminal and the 
Azerbaijan-Georgia rail corridor. In March 2007, Greenoak Group and 
KMG signed a memorandum of cooperation to develop a feasibility 
study for a new refinery in Batumi. 
 
5. (SBU) Mogens Hansen, CEO of the Batumi Oil Terminal, and a member 
of Greenoak Group's senior management, told Energy Officer on 
September 25 that there was "nothing strange at all about the 
decision" not to build a new refinery.  When asked if KMG's decision 
had anything to do with the conflict in Georgia in August, he said, 
"no, no, no -- nothing to do with that -- this was strictly a 
business decision." 
 
6. (U) According to Greenoak, the Batumi terminal's transshipment 
capacity is currently 12 million tons per annum and the reservoir 
capacity is over 510,000 tonnes. Unloading capacity is 212 railway 
tank cars.  Vessel loading is performed at three berths and one 
offshore loading buoy.  The Batumi Oil Terminal is capable of 
handling vessels with deadweight up to 130,000 tons with drafts 
ranging from 12 to 16 meters and length up to 255 meters. 
 
MILAS

Wikileaks

08ASTANA1869, KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, AUGUST 31 –

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Reference ID Created Released Classification Origin
08ASTANA1869 2008-09-25 02:27 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO1021
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1869/01 2690227
ZNR UUUUU ZZH
R 250227Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3395
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0648
RUEHAK/AMEMBASSY ANKARA 2183
RUEHBUL/AMEMBASSY KABUL 0419
RUEHNE/AMEMBASSY NEW DELHI 0518
RUEHAST/USOFFICE ALMATY 0753

UNCLAS SECTION 01 OF 02 ASTANA 001869 
 
DEPT FOR SCA/CEN (O'MARA) 
DEPT PASS TO OPIC - BALLINGER 
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER 
DEPT PASS TO AID - EE-PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS 
USDOC FOR 6110/ITA/TD/BI/RHALPERN 
ANKARA FOR CFC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ENRG EPET EFIN KTDB KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, AUGUST 31 - 
SEPTEMBER 13, 2008 
 
ASTANA 00001869  001.2 OF 002 
 
 
1.  Summary:  This information is drawn primarily from the 
Kazakhstani local press, and has not been verified for accuracy. 
 
-- Kazyna Upgrades Legal Status 
-- Samara-Uralsk Fiber Optic Line 
-- German Technical Assistance to Help Labor Ministry 
-- August Inflation 
-- Kazakhstani Investment in Georgia 
-- Kazakhstan Wants To Build Power Plant in Ukraine 
-- KazMunayGas and Gazprom Neft In Joint Deal 
-- Kazakhstan and China To Build Hydro Plant 
-- Oil and Gas Discovery in West Kazakhstan 
 
Kazyna Upgrades Legal Status 
---------------------------- 
 
2.  The Financial Supervision Agency (FSA) has awarded the Kazyna 
Sustainable Development Fund status as a "financial agency." 
According to the Law on Securities, a financial agency is a bank or 
organization with the right to engage in limited forms of banking, 
including the right to borrow from both domestic and international 
capital markets to invest in priority development projects.  This 
new status will also allow Kazyna to take out loans from the 
national budget.  As a newly named financial agency, Kazyna now 
possess the necessary legal basis to be one of the primary 
implementers of Kazakhstani regional investment policy. 
 
Samara-Uralsk Fiber Optic Line 
------------------------------ 
 
3.  Golden Telecom, which is part of Russia's VympelCom group, has 
recently established a fiber optic line connection from Samara 
(Russia) to Uralsk in northwest Kazakhstan.  According to Golden 
Telecom representatives, the new fiber optic line will expand the IT 
backbone of KazakhTelecom, thereby accelerating Kazakhstan's 
integration into the international telecommunications market, and 
significantly upgrade regional telecommunication services. 
 
German Technical Assistance to Help Labor Ministry 
--------------------------------------------- ----- 
 
4.  The Ministry of Labor and Social Protection has signed a 
memorandum on cooperation with the German Society for Technical 
Cooperation (GTZ).  The purpose is to create a competitive local 
labor force in Kazakhstan.  The partners hope to develop mechanisms 
that better identify the needs of the local labor force, as well as 
the impact of migrant labor. 
 
August Inflation 
---------------- 
 
5.  According to the Kazakhstan Statistics Agency, prices in August 
2008 were 20.1% higher than in August 2007.  Food prices posted the 
highest gains, rising 27.9% year-on-year. Service prices grew 17.4% 
year-on-year, and prices for non-food goods rose by a more modest 
rate of 11.4% year-on-year.  However, month-on-month inflation 
slowed somewhat, registering 0.8% for August, in comparison with 
0.9% for July and 1.2% for June. 
 
Kazakhstani Investment in Georgia 
--------------------------------- 
 
6.  According to Renaissance Capital, Kazakhstani investments in 
Georgia total approximately $2 billion, including about $800 million 
invested by BTA bank and $500 million by KazMunayGas. 
 
Kazakhstan Wants To Build Power Plant in Ukraine 
--------------------------------------------- --- 
 
7.  According to Kazakhstan's Ambassador to Ukraine, Amangeldy 
Zhumabayev, Kazakhstan is negotiating the construction of a power 
plant in Uzhgorod, Ukraine, which would utilize approximately 1 
billion cubic meters of natural gas from Kazakhstan annually. 
 
KazMunayGas and Gasprom Neft in Joint Deal 
 
ASTANA 00001869  002.2 OF 002 
 
 
------------------------------------------ 
 
8.  KazMunayGas and Russia's Gasprom Neft intend to sign a framework 
agreement to jointly participate in oil exploration, production, 
processing, and sale projects in Kazakhstan, Russia, and Europe. 
 
Kazakhstan and China To Build Hydro Plant 
----------------------------------------- 
 
9.  The State Asset Management Holding Company "Samruk" has 
announced a project to construct a 300 megawatt hydropower plant in 
Almaty oblast that will come on-stream in 2012. The Kazakhstan 
Development Bank and the State Development Bank of China will 
finance the project. Eighty percent of the project's labor will come 
from Kazakhstan, 20 percent from China. 
 
Oil and Gas Discovery in West Kazakhstan 
---------------------------------------- 
 
&#182
;10.  A large oil and gas deposit has been found near Petrov village 
in West Kazakhstan oblast (region).  According to experts, this is 
one of the largest deposits discovered in Kazakhstan in the past 15 
years.  The quality of oil in the deposit is comparable to that of 
Brent oil.  Commercial oil extraction is scheduled to start in 2010. 
 
 
MILAS 
1 
 
 
4

Wikileaks

08ASTANA1868, KAZAKHSTAN – CASPIAN OIL PRODUCTION, PLANS, AND PROSPECTS

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Reference ID Created Released Classification Origin
08ASTANA1868 2008-09-25 02:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1016
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1868/01 2690226
ZNR UUUUU ZZH
O 250226Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3392
INFO RUCNCIS/CIS COLLECTIVE 0645
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS SECTION 01 OF 03 ASTANA 001868 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO TDA FOR DAN STEIN 
ENERGY FOR TYLER TILLER, COMMERCE FOR DANICA STARKS 
 
E.O. 12958: N/A 
TAGS: EPET EINV PGOV KZ
SUBJECT:  KAZAKHSTAN - CASPIAN OIL PRODUCTION, PLANS, AND PROSPECTS 
 
1. (SBU) Summary.  Oil production at Tengiz has expanded to 540,000 
barrels per day (bpd) and the Kashagan consortium is expected to 
produce at least 150,000 bpd by 2013 and up to 1.5 million bpd by 
2020. Tengizchevroil (TCO) could easily increase oil production to 
600,000 bpd but is constrained by a lack of rail car and pipeline 
capacity. TCO also faces ongoing issues with workforce development, 
sulfur storage, and facility security.  End summary. 
 
PRODUCTION AT KAZAKHSTAN'S SUPER-GIANT FIELDS 
------------------------------ -------------- 
 
2.  (SBU) Charge and Energy Officer toured Tengiz with TCO Deputy 
Manager for Government and Public Affairs Linsi Crain on September 
19.  Total recoverable oil at the Tengiz and Korolev fields through 
April 2033 is estimated at 750 million to 1.1 billion metric tons 
(approximately 6 to 9 billion barrels).  Current production capacity 
is 70,000 metric tons (or 540,000 barrels) of oil per day and 22 
million cubic meters (or 765 million standard cubic feet) of gas per 
day.  Crain confided that TCO could easily increase production to 
600,000 bpd but is constrained by a lack of rail car and pipeline 
capacity.  The day of our arrival, TCO was expected to start 
operation of a new sour gas injection and second generation plant, 
but they postponed the start of operations until the day after our 
visit, ostensibly for our own safety, given the large gas flares 
that initial operations would produce.  When asked how important TCO 
was to Chevron, Crain, a Chevron employee seconded to TCO, said they 
like to joke that "TCO feeds us Monday through Thursday, Gorgon 
(Australia's large natural gas field) on Friday, and the other guys 
take care of us on the weekend." 
 
3.  (SBU) Meanwhile, production at Kashagan, Kazakhstan's other 
super-giant Caspian shore oil field, is expected to start in 2013. 
Negotiations are ongoing to turn a January memorandum of 
understanding (MOU) on restructuring Kashagan into a more formal 
agreement, with the latest deadline set for October 25.  The 
Government of Kazakhstan and the Kashagan consortium -- Agip KCO -- 
have reportedly come to agreement on the details of a new operating 
structure, but not on the terms and timing of production.  According 
to Agip KCO Public Relations Manager Richard Fritz, if the deal 
holds up, ENI would continue to run the Experimental Program, 
including onshore, offshore, and drilling operations, and would 
produce up to 450,000 bpd by the end of that phase of the project. 
Under Phase 2, ENI would manage onshore operations, while Shell and 
ExxonMobil would lead offshore production, with ExxonMobil having 
particular responsibility for developing the Kalamkas field. A new 
joint operating company, led initially by Total, would be created 
with overall management responsibility for the consortium. 
KazMunaiGaz and Shell would also form a new company to manage 
overall production operations. 
 
4. (SBU) Agreement on production volumes and schedules, however, has 
not been reached. Agip KCO's Fritz told us on September 20 that -- 
despite press reports -- the Agip KCO consortium is committed to 
producing just 150,000 bpd by the end of the experimental phase in 
2013, not 450,000 bpd, as Minister of Energy Mynbayev was quoted as 
saying after his visit to Kashagan on September 19.  Fritz confided 
to us that Agip KCO could, if necessary, produce 170,000 bpd right 
now, using existing appraisal wells. The Kashagan contract includes 
rights to offshore oil-rich reservoirs at Kalamkas, Kairan, Aktote, 
and Kashagan SW. In total, Kashagan has up to 38 billion barrels of 
oil in place, of which 13 billion are potentially recoverable with 
the use of gas re-injection. By 2020, peak production is expected to 
be 1.5 million bpd. (Note: In a private dinner with Charge and 
Energyoff on September 20, Steve Rose, General Manager for 
ExxonMobil Kazakhstan, told us that he is not fully convinced that 
Kashagan will live up to the hype.  ExxonMobil will drill an 
appraisal well at Kalamkas in 2009 "to see what we've got." End 
note). 
 
LIMITED RAIL AND PIPELINE CAPACITY CONSTRAIN TENGIZ PRODUCTION 
------------------------------ ------------------------------- 
 
5.  (SBU) TCO currently owns or leases more than 22,000 railroad 
cars to transport crude, liquid petroleum gas, and sulfur, making it 
one of the largest rail car operators in the world.  According to 
TCO's Crain, with 4,000 more rail cars, TCO could increase 
production to 600,000 bpd. Unfortunately, she said, there is a 
shortage of rail transportation capacity in Kazakhstan and -- in 
addition to oil and gas -- rail cars are in high demand for the 
transportation of wheat and cement.  Agip KCO's Fritz and Kairat 
Urazbaev, First Deputy General Director of the Atyrau oil refinery, 
both confirmed the lack of sufficient rail cars for oil and gas 
transportation.  Agi
p KCO intends to transport approximately 300,000 
bpd of the initial 450,000 bpd production from Kashagan via rail. 
 
6. (SBU) In addition, failure to reach agreement on the expansion of 
 
ASTANA 00001868  002 OF 003 
 
 
the Caspian Pipeline Consortium (CPC) pipeline has become a serious 
constraint to increased production for TCO.  TCO currently ships 80% 
of its oil via CPC and noted that it is already near full capacity. 
Once Kashagan starts production, demand for pipeline capacity will 
be even greater. Agip KCO's Fritz told us that they have an 
agreement with CPC to use the pipeline to transport up to 66,000 bpd 
of oil from Kashagan. Rail and pipeline constraints have encouraged 
TCO to focus on other means of transport, including tankers.  By 
mid-October, TCO is expected to ship 20,000 bpd by tanker across the 
Caspian to Baku, where Tengiz oil will flow into the 
Baku-Tbilisi-Ceyhan (BTC) pipeline for the first time. 
 
QUALITY OF LIFE AND WORKFORCE DEVELOPMENT 
----------------------------------------- 
 
7.  (SBU) Crain described TCO as a $20 billion operation and 
explained that the consortium has already invested $7 billion in 
drilling, injection, transportation, and processing facilities at 
Tengiz.  The company recently completed construction of new housing 
for its 3,000 employees on site.  Each of the six new housing units 
contains a fitness center, swimming pool, and community center. 
Kazakhstani citizens hold 83% of TCO positions and represent 77% of 
TCO's managerial workforce.  For example, Kazakhstanis hold the 
company's top positions in the legal, human resources, and public 
relations departments.  Crain said that TCO has made a concerted 
effort to develop local engineering expertise, particularly among 
female employees, but has had difficulty.  For example, Kazakhstani 
law prohibits pregnant women from working with or near heavy 
machinery, which means in practice that as soon as a female engineer 
discloses her pregnancy (or is found to be pregnant in a routine 
medical checkup), she must be reassigned to another part of the 
company. Agip KCO's Fritz also told us that they have had difficulty 
developing a skilled local workforce, particularly welders and pipe 
fitters.  During the past three years, Agip KCO has trained more 
than 700 workers for these positions at its Atyrau Training Center, 
but once the workers find employment, turnover is extremely high. 
"They don't want to work these long hours or under these difficult 
conditions," according to Fritz. 
 
8. (SBU) TCO has a modern medical center on site, with several 
doctors on staff. Crain told us that local residents in and around 
Tengiz come to TCO when they have a medical emergency and women have 
been known to come to TCO to have their babies delivered.  The 
dining hall at TCO serves 3,000 people and offers Indian, Asian, and 
Tex-Mex cuisine. The company prides itself on its safety record 
There have been no TCO "days away from work" (DAFW) cases since 
April 2007, which totaled to more than 12 million cumulative man 
hours without a DAFW injury through July 2008.  To promote traffic 
safety, TCO plans to bring U.S. traffic safety engineers to Atyrau 
and Almaty in October to conduct training seminars and evaluate 
local traffic conditions. Crain welcomed the participation of 
Embassy staff in those activities. 
 
SULFUR STORAGE AND DISPOSAL STILL AN ISSUE 
------------------------------------------ 
 
9.  (SBU) TCO continues to grapple with legal, financial, and public 
relations issues stemming from the enormous production of sulfur 
associated with Tengiz oil production.  Sagyn Lukpanov, director of 
the social entrepreneurial corporation Caspiy, reminded us on 
September 18 that there are 9 million tons of sulfur stored above 
ground at Tengiz.  He acknowledged that for the past year, TCO has 
been able to sell more sulfur than it produces, particularly to 
China for agricultural purposes, but claims that the company has not 
sufficiently addressed the long-term storage and health issues of 
its sulfur production. (Note:  TCO denies that there is any 
environmental or health impact whatsoever from its on-site 
above-ground sulfur storage.  End Note.)  Caspiy, which was created 
with financial and material support from the local government and 
remains 49% government-owned, established a working group with TCO, 
Agip KCO, the Ministry of Energy and Mineral Resources, and the 
Ministry of the Environment to draft a national strategy for sulfur 
storage, transportation, and sales.  According to Lukpanov, TCO 
agreed in a meeting this summer with Minister of Energy Mynbayev to 
eliminate all of the sulfur stored above-ground by 2013.  Deputy 
Akim Nurman Nurbekov told us on September 18 that TCO had agreed to 
remove all sulfur by 2012.  TCO's Crain insisted, however, that TCO 
had made no firm commitments and that there was no agreement in 
writing to remove all Tengiz sulfur by a certain date. She said that 
Chevron's senior leadership is working directly with Deputy Prime 
Minister Shukayev to resolve this issue. Crain reminded us that TCO 
paid a fine of $370 million to the oblast government for alleged 
violations of environmental regulations associated with its sulfur 
production and storage, but maintained that the central authorities 
have quietly agreed that TCO may deduct this amount from future 
royalty payments to Kazakhstan.  When asked whether Kashagan will 
 
ASTANA 00001868  003 OF 003 
 
 
produce the same levels of sulfur as TCO, Agip KCO's Fritz said, 
"No, because we will re-inject 80% of the sulfur gas back into the 
well from a very early stage. In case we do have to store sulfur 
above ground, we will construct a temporary storage facility where 
the sulfur blocks will be fully sealed and will have no contact with 
the air." 
 
SECURITY ISSUES AT TCO 
---------------------- 
 
10. (SBU) Security at TCO is tight, although there are areas of 
vulnerability.  The company strictly enforces a 100% id check policy 
on site, even for VIP visitors touring the facility in a TCO vehicle 
together with senior management.  Nevertheless, TCO reports minor 
problems such as the theft of scrap metals and other materials.  A 
public highway runs directly parallel to TCO's main production 
facility and private vehicles can approach up to 200 meters of the 
facility without encountering a roadblock. Steve Witham, TCO's 
Security Manager, told us that they successfully relocated two local 
villages before the facility was built and noted that the highway is 
infrequently traveled. Nevertheless, he acknowledged that the 
highway posed a security risk and Crain deliberately avoided taking 
our party down that road for traffic safety reasons.  Witham said 
that cooperation with the local Kazakhstani law enforcement and 
security forces was generally good, although he characterized them 
as "inefficient" and "opportunistic." 
 
MILAS

Wikileaks

08ASTANA1867, KAZAKHSTAN HOLDS “DESIGN BASIS THREAT” GLOBAL

WikiLeaks Link

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Discussing cables
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Reference ID Created Released Classification Origin
08ASTANA1867 2008-09-25 02:03 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0002
RR RUEHWEB

DE RUEHTA #1867/01 2690203
ZNY CCCCC ZZH
R 250203Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3390
INFO RUCNCIS/CIS COLLECTIVE 0643

C O N F I D E N T I A L ASTANA 001867 
 
SIPDIS 
 
E.O. 12958: DECL: 09/24/2018 
TAGS: KNNP MNUC PREL KZ
SUBJECT: KAZAKHSTAN HOLDS "DESIGN BASIS THREAT" GLOBAL 
INITIATIVE EXERCISE 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
SUMMARY 
------- 
 
1. (C) Participants from eight countries and various 
Kazakhstani government bodies and organizations attended 
Kazakhstan's second Global Initiative (GI) exercise of 2008 
during September 10-13.  The event, which took place at 
facilities of the Ulba Metallurgical Plant in 
Ust-Kamenogorsk, was dedicated to discussion of the physical 
protection of nuclear materials.  Kazakhstan expressed 
appreciation for USG participation.  Various high-level 
speakers, including Vice Minister of Energy and Mineral 
Resources Akchulakov, commented on Kazakhstan's leadership 
role in nuclear non-proliferation and successes safeguarding 
nuclear materials, such as lowly enriched uranium (LEU).  A 
Kazatomprom representative briefly commented on one attempted 
theft of nuclear materials that was prevented in 1995, but 
overall, there appeared to be some reluctance on the part of 
Kazakhstani officials to provide concrete details on their 
physical security efforts.  Conference participants were 
given a tour of the Ulba Metallurgical Plant, a 
uranium-pellet manufacturing facility which is apparently one 
of the most prosperous enterprises in eastern Kazakhstan. 
End Summary. 
 
APPRECIATION FOR USG PARTICIPATION 
---------------------------------- 
 
2. (SBU) Kazakhstan hosted its second Global Initiative 
exercise of 2008 during September 10-13.  The event, called 
"Design Basis Threat," took place in Ust-Kamenogorsk at 
facilities of the Ulba Metallurgical Plant.  Over forty 
representatives from eight countries -- Cote d'Ivoire, 
Kazakhstan, Morocco, Russia, South Korea, Ukraine, the United 
Arab Emirates, and the United States - attended.  The USG was 
represented by an officer from State ISN/WMDT and a poloff 
from the Embassy.  Participants from various Kazakhstani 
government and quasi-government organizations -- including 
the Ministry of Energy and Mineral Resources, Kazakhstan's 
Atomic Energy Agency, the Ministry of Internal Affairs, the 
National Nuclear Center, and Kazatomprom -- made 
presentations on the ways in which Kazakhstan ensures the 
protection of nuclear materials.  They described procedures 
at all levels of the Kazakhstani government, from the 
country's broad commitments to international treaties to how 
local authorities and the private sector work together to 
protect the Ulba Metallurgical Plant, which manufactures 
uranium pellets from lowly-enriched uranium. 
 
3. (SBU) The Kazakhstanis expressed appreciation for USG 
participation, and stressed that they looked forward to 
continuing close cooperation between Kazakhstan and the USG 
on the Global Initiative.  (Comment:  Kazakhstan has been  a 
very active member of the Global Initiative.  It hosted the 
third Global Initiative meeting in June 2007 in Astana, as 
well as two GI exercises in 2008.  It currently plans to host 
two more GI exercises in 2009.  End Comment.) 
 
RELUCTANCE TO PROVIDE DETAILS ON PHYSICAL PROTECTION 
--------------------------------------------- ------- 
 
4. (SBU) During the event, Vice Minister of Energy and 
Mineral Resources Bolat Akchulakov noted that under President 
Nazarbayev, Kazakhstan had "strengthened the foundations" for 
a system of non-proliferation and called on other countries 
to follow Kazakhstan's example.  Kazatomprom Vice President 
Sergei Yashin stated that since the rising worldwide demand 
for energy is forcing countries to use more nuclear power, 
the physical protection of nuclear materials and facilities 
is an issue of great importance.  Other Kazakhstani 
government representatives commented on the physical security 
of several facilities and transport of nuclear materials in 
Kazakhstan. 
 
5.  (C)  Victor Pshenichniy, Deputy Director of Security at 
Kazatomprom, discussed ways to lower threats against nuclear 
facilities.  He stressed in particular the importance of 
paying reasonable wages to workers and maintaining good 
morale at high threat facilities.  He made mention of an 
incident at the Ulba Metallurgical Plant in 1995 when 
Kazakhstani authorities purportedly prevented the theft of 
nuclear materials.  However, when asked for more details 
about such incidents by the delegate from Morocco, 
Kazakhstani seminar participants declined to comment. 
(Comment:  Overall, the Kazakhstani participants appeared to 
be somewhat reluctant to share detailed and technical 
information on nuclear security, even in the portions of the 
seminar devoted to "informal interaction.") 
 
INTERPRETATION PROBLEMS 
 
----------------------- 
 
6.  (SBU) Unfortunately, there were problems with the 
interpretation services provided at the event.  Several of 
delegations, notably the representatives from Morocco and 
South Korea, expressed frustration with this situation.  Only 
one presentation, given by the Chief of the Control and 
Accountancy Department at the Ulba Metallurgical Plant, 
Yevgeniy Yasko, was accompanied by English-language slides. 
Yasko, who has visited several facilities in the U.S. on 
Energy Department-sponso
red exchanges, emphasized how 
Kazakhstan used new technology, received as part of the 
Nunn-Lugar CTR program, to safeguard nuclear materials. 
 
ULBA PLANT APPEARS SUCCESSFUL 
----------------------------- 
 
7.  (SBU) Kazakhstan's national atomic energy company, 
Kazatomprom, was responsible for selecting the Ulba 
Metallurgical Plant to host the GI event.  The plant 
currently imports lowly enriched uranium (LEU) from Russia 
and processes it into fuel pellets, which are then re-sold to 
Russia for further processing.  Ulba was a well-chosen venue 
for the GI event from several points of view.  First, Ulba 
houses large quantities of LEU, resulting in regular IAEA 
monitoring of the plant.  Second, during Soviet times, Ulba 
was a secret facility, and access was completely restricted. 
 
8. (C) During the GI event, participants were given a tour of 
the plant, which was ostensibly shut down for IAEA 
inspections.  The two Kazakhstani Foreign Ministry 
representatives in attendance, one of whom stated that he is 
a physicist who has been working on nuclear issues for 15 
years, had never before been invited to visit Ulba.  They 
said that the security procedures for admission were very 
complicated.  The plant's equipment and the administrative 
buildings appeared modern, although the buildings and grounds 
of the uranium production facilities did not show extensive 
signs of renovation.  Kazatomprom's Victor Pshenichniy 
recalled the role of Ulba in the Soviet nuclear program with 
nostalgia and pride, and stated that a museum is being built 
on the grounds. 
 
9. (SBU) Participants also visited a resort operated by Ulba, 
located approximately 90 minutes by car from Ust-Kamenogorsk. 
 The resort is one of three reserved for use by company 
employees for vacationing.  It underwent extensive 
renovations two years ago, an indication of the prosperity of 
the company at the present.  Several employees from Ulba 
attending the conference emphasized that Ulba was one of the 
best companies in eastern Kazakhstan and offered plentiful 
opportunities for professional advancement. 
MILAS

Wikileaks

08ASTANA1865, KAZAKHSTAN – ATYRAU OIL REFINERY LOOKS TO UPGRADE

WikiLeaks Link

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Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1865.
Reference ID Created Released Classification Origin
08ASTANA1865 2008-09-24 11:16 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0434
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1865 2681116
ZNR UUUUU ZZH
O 241116Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3389
INFO RUCNCIS/CIS COLLECTIVE 0642
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS ASTANA 001865 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO TDA FOR DAN STEIN 
ENERGY FOR TYLER TILLER, COMMERCE FOR DANICA STARKS 
 
E.O. 12958: N/A 
TAGS: EPET EINV PGOV KZ
SUBJECT:  KAZAKHSTAN - ATYRAU OIL REFINERY LOOKS TO UPGRADE 
 
1. (SBU) Charge and Energy Officer met with Kairat Urazbayev, First 
Deputy General Director of the Atyrau oil refinery, on September 18 
and toured the refinery's processing facilities.  The original plant 
was built in 1936, but was upgraded most recently in 2006.  It is 
therefore, said Urazbayev, both the oldest and the most modern 
refinery in Kazakhstan. Some processing equipment was provided by 
the U.S. in 1945-7 as part of the lend-lease program and the 
refinery underwent a major reconstruction project in the 1970s. In 
1995, the refinery contracted with a U.S. firm, Honeywell subsidiary 
UOP, to rebuild the diesel refinery facility.  UOP supplied 
catalyzers for catalytic reforming and provided technology for 
hydrofining and dewaxing diesel fuel.  The total cost of the rebuild 
-- including equipment made and assembled by Japan's JDC Corporation 
-- was $400 million.  Urazbayev said the Atyrau refinery is eager to 
do more business with U.S. companies and is planning a $1 billion 
modernization project.  According to an unnamed source at 
KazMunaiGas's Trading House subsidiary, which owns 100% of the 
Atyrau refinery, it will take five years and up to $2.5 billion in 
order to bring the Atyrau refinery up to Western European standards. 
 The other two major refineries in Kazakhstan -- in Pavlodar and 
Shymkent -- are also currently undergoing renovation. 
 
2. (SBU) In 2007, the Atyrau refinery operated at 70% of capacity, 
processing 3.8 million tons of crude, the highest level in the last 
ten years.  In 2008, they expect to process 4 million tons of crude 
and in 2009, 5 million tons. The customs duty on the export of 
Kazakhstani crude oil has been a boon to business.  As Urazbayev 
said with a smile, "It has had some small positive effect."  (Note: 
The government has justified the crude oil export duty in part by 
claiming it will increase the supply of crude to domestic 
refineries, thereby promoting value-added processing in Kazakhstan 
and stabilizing the domestic price of gasoline.  End Note.) 
Currently, most of the oil the refinery receives for processing 
derives from Kazakhstan's oldest oil producing field, in Uzen; 
additional crude comes from Kusk-Kumkol and Russia. 
 
3. (SBU) Over the past several years, the refinery has adjusted its 
product lines to meet European quality standards and World Trade 
Organization commitments.  During Soviet times, 50% of the 
refinery's output was mazut, a low-quality fuel oil used mainly in 
power plants; now mazut makes up less than one-third of the 
refinery's product mix.  When asked about Minister of Energy 
Mynbayev's remarks on September 4 that there is insufficient 
domestic refinery capacity, Urazbayev said the Atyrau refinery has 
no difficulty meeting all of the domestic demand in western 
Kazakhstan for refined products and in fact exports some of their 
finished products to Russia.  When asked about transportation by 
rail, Urazbayev confirmed that they do not have enough railway cars 
and said "we could really use more rail cars." 
 
4. (SBU) There are constraints to the plant's ability to expand 
because they are located within the Atyrau city limits, but they are 
considering building a new plant in a new location farther from the 
city center.  Urazbayev said the refinery is eager to offer its 
services to process up to 1 million tons of sulfur from 
Tengizchevroil (TCO) and has sent several business proposals to TCO, 
but has not received a response.  The refinery has one continuous 
gas flare from sour gas separation operations and two other gas 
flare stacks available on standby in case of emergency.  (Note: When 
asked about the Atyrau refinery, Steve Rose, ExxonMobil Kazakhstan's 
General Manager, said it is the biggest polluter in the oblast and 
he "wouldn't touch it with a ten-foot pole." End Note.) 
 
MILAS

Wikileaks

08ASTANA1863, KAZAKHSTAN – CHARGE’S VISIT TO HARE KRISHNA SITE ATTRACTS

WikiLeaks Link

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Discussing cables
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Reference ID Created Released Classification Origin
08ASTANA1863 2008-09-24 11:12 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0432
OO RUEHAST RUEHBI RUEHCI RUEHFL RUEHLA RUEHLH RUEHMRE RUEHPOD RUEHPW
RUEHROV RUEHSR
DE RUEHTA #1863 2681112
ZNR UUUUU ZZH
O 241112Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3387
INFO RUCNOSC/OSCE POST COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS ASTANA 001863 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM KIRF PGOV KZ
SUBJECT:  KAZAKHSTAN - CHARGE'S VISIT TO HARE KRISHNA SITE ATTRACTS 
INTEREST OF LOCAL AUTHORITIES 
 
1. (SBU) The Charge visited the Hare Krishna community 20 kilometers 
outside of Almaty on September 17.  The Krisha community's property 
at this site has been the subject of a long-running dispute with 
local authorities, who have tried to force the Krishnas off of their 
valuable land plot.  The head of Hare Krishna community, Victor 
Golous, led the Charge on a tour of the property, including the Hare 
Krishna temple, and described the problems the community was 
facing. 
 
2. (SBU) Just minutes after the Charge's arrival, several 
representatives of the local akimat (i.e., government 
administration), including the head of its internal affairs 
department, also arrived at the site.  They complained that the 
Charge was visiting the area without advance notice to the local 
authorities.  They maintained that when the British ambassador had 
visited the Hare Krishna community, he had provided such advance 
notice.  The Charge explained that he was not making an official 
visit to the region, but offered to pay a visit to the local akim 
(government administration head).  After calling her superiors, the 
internal affairs department head said that there was no need to 
visit the akim at this time.  (Note:  The MFA has made clear to us 
that diplomats do not need government approval to travel within 
Kazakhstan.  However, the MFA also requests that we notify them of 
any official travel outside of Astana, allegedly so they can ensure 
that protocol and security arrangements are in place.  Local 
authorities will only meet with diplomats if advance request is made 
through the MFA.  End Note.) 
 
3. (SBU) Following this incident, Golous explained to the Charge 
that approximately 30 Hare Krishna devotees reside at the site. 
Several hundred people, he maintained, attend Hare Krishna services 
there on Sundays.  This includes some local residents and their 
children, to whom the Hare Krishna community distributes food. 
Golous described relations between the community and local residents 
as amicable. 
 
4. (SBU) Golous reminded the Charge that the Hare Krishnas had 
recently rejected five land plots offered by local authorities in 
exchange for the Hare Krisha's current property.  According to 
Golous, two plots were too far (70 kilometers) from Almaty, out in 
the steppe with no roads, electricity, or water.  The community 
needs water for irrigation and for its 30 head of cattle.  A third 
plot was a former cemetery, and a fourth was adjacent to a cemetery. 
 In the end, the authorities actually withdrew the offer of the 
fourth plot because they decided they wanted to expand the cemetery. 
 The fifth plot is a dumping ground with no water or electricity 
supply. 
 
5. (SBU) According to Golous, the Hare Krishna community's latest 
counterproposal to the authorities is that they would keep a 
15-hectare portion of their current 47-hectare property, but not ask 
for any compensation in return.  The authorities have not responded 
to this offer.  Golous said that the Hare Krishnas have been invited 
to an OSCE meeting (presumably in Vienna) in October to explain 
their situation. 
 
6. (SBU) Comment:  The Hare Krishna stalemate may very well continue 
for some time.  The current climate for "non-traditional" religious 
groups (with, among other things, the government pressing for more 
restrictive legislation to control them better) does not augur for a 
mutually satisfactory resolution in the near future.  However, as we 
have stressed from the beginning, while this dispute is in part 
about religion -- the government harbors deep suspicions about the 
Hare Krishnas -- it is also in part about a valuable piece of land 
that other interested parties want for their own benefit.  End 
Comment. 
 
MILAS

Wikileaks

08ASTANA1858, KAZAKHSTAN – DEMARCHE DELIVERED REGARDING MESA

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Reference ID Created Released Classification Origin
08ASTANA1858 2008-09-23 11:57 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0012
OO RUEHWEB

DE RUEHTA #1858 2671157
ZNY CCCCC ZZH
O 231157Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3384
INFO RUEHUNV/USMISSION UNVIE VIENNA 0064

C O N F I D E N T I A L ASTANA 001858 
 
SIPDIS 
 
DEPARTMENT FOR ISN/RA, IO/T, AND SCA/CEN 
 
E.O. 12958: DECL: 09/23/2018 
TAGS: IAEA PARM MNUC KZ
SUBJECT: KAZAKHSTAN - DEMARCHE DELIVERED REGARDING MESA 
GROUP SEAT ON IAEA BOARD OF GOVERNORS 
 
REF: STATE 99746 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
 1. (C) Charge delivered reftel demarche to Deputy Foreign 
Minister Sarybay on September 23, stressing that the U.S. is 
marshalling support for Afghanistan's candidacy for the open 
IAEA BOG MESA seat, but would like to assist Kazakhstan in 
resolving questions about its membership in the IAEA MESA 
group, with a view to supporting a Kazakhstani candidacy in a 
future cycle.  Sarybay took the points relatively well, 
responding that "to be honest, this is a good option for us." 
 Kazakhstan, he said, was surprised about doubts regarding 
its MESA membership.  The government was not well-prepared 
for a 2008 BOG candidacy, so putting off Kazakhstan's 
candidacy until next year would provide for more time to 
prepare the groundwork for a MESA seat bid, Sarybai contended. 
MILAS

Wikileaks

08ASTANA1850, KAZAKHSTAN – RELIGION LAW AMENDMENTS HEADED TOWARD

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Reference ID Created Released Classification Origin
08ASTANA1850 2008-09-22 12:33 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO8254
OO RUEHFL RUEHLA RUEHMRE RUEHROV RUEHSR
DE RUEHTA #1850/01 2661233
ZNY CCCCC ZZH
O 221233Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3377
INFO RUCNOSC/OSCE POST COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001850 
 
SIPDIS 
 
E.O. 12958: DECL: 09/22/2018 
TAGS: PHUM KIRF PGOV KZ
SUBJECT: KAZAKHSTAN - RELIGION LAW AMENDMENTS HEADED TOWARD 
SECOND MAZHILIS READING 
 
REF: ASTANA 1107 (NOTAL) 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
SUMMARY 
------- 
 
1.  (C) The Mazhilis will hold its second reading on a 
package of amendments to Kazakhstan's religion law on 
September 24.  The latest text is an improvement over the 
June version that was passed at the first reading, although 
it still includes several problematic provisions.  Civil 
society and religious contacts maintain that this latest text 
remains far too restrictive, but they predict that it will 
pass the Mazhilis unchanged.  NGO sources passed us a 
document with remarks purportedly made at a closed government 
meeting by Presidential Administration Deputy Chief Maulen 
Ashimbayev, which indicate that exerting greater control over 
"non-traditional" religious groups is an important priority 
for the government.  End Summary. 
 
FURTHER IMPROVEMENTS ... 
------------------------ 
 
2.  (SBU) The Mazhilis working group responsible for 
amendments to Kazakhstan's religion law has announced that 
the draft text is ready for a second Mazhilis reading, which 
is scheduled for September 24.  If the legislation passes 
without changes, it will move to the Senate for 
consideration.  Since the legislation went through a first 
reading on June 10 (see reftel), the working group has made 
several more changes to the text.  (Note:  The Mazhilis 
usually approves the general concept of a piece of 
legislation at the first reading, and reserves 
provision-by-provision review for the second reading. End 
Note.)  The June text was a clear improvement over the 
original legislation introduced in May.  The latest version 
appears to incorporate several further improvements, most 
notably as follows: 
 
-- A proposal for a restrictive definition of a religious 
confession (as a "movement known throughout the region, with 
historic recognition") has been removed.  Instead, the latest 
text retains a broader definition that exists in current law. 
 
--  Several proposed restrictions on missionary activities 
have been removed, including (1) a requirement to obtain the 
permission of neighbors for activities conducted in private 
homes, and (2) a ban on missionary activities in secular 
institutions, public places, and on the streets. 
 
... BUT PROBLEMATIC PROVISIONS REMAIN 
------------------------------------- 
 
3.  (SBU) Despite the abovementioned changes, the latest 
draft nevertheless still contains a number of points of 
concern.  In particular, a religious group would still have 
to have at least fifty members to register.  Groups with 
fewer than that number would be barred from proselytizing and 
from renting public places for services, though they would be 
allowed to publish their own religious literature.  The 
latest draft would also require oral permission from parents 
for minors to attend religious events, and would levy fines 
on religious organizations for failing to comply with this 
provision.  In addition, the Ministry of Justice's Religious 
Issues Committee (the body responsible for registering 
religious groups) would retain broad powers to review, 
suspend, and deny registration to organizations, and all 
religious organizations would be required to re-register 
within one year. 
 
CIVIL SOCIETY SAYS "CONCEPT" OF LAW IS WRONG 
--------------------------------------------- -- 
 
4.  (SBU) Key NGO leaders remain highly skeptical of the most 
recent changes introduced into the legislation.   Almaty 
Helsinki Committee head Ninel Fokina and Association of 
Religious Organizations of Kazakhstan head Alexander Klyushev 
told us separately on September 17 that "the concept of the 
law is deficient" and the legislation itself, not its 
individual provisions, must be rethought.  Klyushev said if 
the current text becomes law, a pastor who decides to meet 
with believers in a neighboring district would have to 
separately register with the authorities in that district, 
something Klyushev called a "dramatic infringement on 
religious freedom."  Fokina contended that the draft law 
would "destroy Kazakhstan's image as a liberal country 
tolerant to diverse faiths."  Both Fokina and Klyushev 
strongly believe that the latest text will pass through a 
second Mazhilis reading unchanged.  They intend to direct 
their lobbying efforts at the Senate, with the hope of 
stopping the legislation there. 
 
ASTANA 00001850  002 OF 002 
 
 
 
TIGHTER CONTROL A GOVERNMENT PRIORITY 
------------------------------------- 
 
5. (C) Klyushev asserted to us that the amendments to the 
religious law are just one part of a broader drive on the 
part of the government to increase control over 
"non-traditional" religious groups.  As proof, he presented 
us with a copy of a statement Presidential Administration 
Deputy Chief Maulen Ashimbayev purportedly made in August at 
a closed high-level government meeting on the government's 
priorities in domestic policy. (Comment: The same statement 
was passed to us by Fokina.  Both Klyushev and Fokina said 
they could
not reveal the source that gave them the document 
and asked that we keep it confidential.  While the substance 
of the document is not entirely surprising, we have no/no 
means of independently confirming its authenticity.  End 
Comment.) 
 
6. (C) The issue of "non-traditional" religions figured 
prominently in Ashimbayev's alleged remarks.  He maintained 
that there are organizations associated with Protestant 
churches and other "non-traditional" religious groups which 
are not themselves registered as religious groups but are 
nevertheless involved in religious education and 
proselytizing.  He called on oblast akims (i.e., regional 
governors) and government bodies to "administratively 
curtail" the activities of such organizationas.  He also 
ordered an "unofficial moratorium" on the construction of any 
new religious buildings of "non-traditional" groups, except 
in special circumstances with the approval of the Religious 
Issues Committee and the Presidential Administration.  He 
directed that "the sixty or so independent mosques" be 
brought "under the patronage of the Spiritual Administration 
of Muslims in Kazakhstan." 
 
7.  (C) Ashimbayev admitted that the new religious 
legislation would bring "greater regulation in the religious 
sphere."  Talking about the mandatory re-registration of all 
religious groups, he said that "a number of organizations 
will have to be closed, others supported."  "This is our 
task," Ashimbayev reportedly said, and this work must be 
conducted "quietly and precisely," with careful coordination 
with the central authorities. 
 
COMMENT 
------- 
 
8.  (C)  We fully expect that some form of new religious 
legislation will become law in the coming months.   The fact 
that the Mazhilis working group further softened the text in 
response to criticism from civil society and the 
international community is nevertheless a good sign. 
Ashimbayev's purported remarks are perhaps not surprising. 
It has been clear for some time that with the proposed 
legislation as well as through other initiatives, the 
government is intent on exercising greater control over 
"non-traditional" religious groups -- as well as over 
independent Muslims.  Senate Chairman Tokayev promised us in 
June that the Senate would take into account the 
recommendations of ODIHR and, if necessary, would make 
changes in the text ultimately approved by the Mazhilis.  We 
may see very soon whether he keeps to his word.  End Comment. 
 
MILAS

Wikileaks

08ASTANA1849, KAZAKHSTAN – RELIGION LAW AMENDMENTS HEADED TOWARD

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Reference ID Created Released Classification Origin
08ASTANA1849 2008-09-22 11:38 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO9139
OO RUEHBI RUEHCI RUEHFL RUEHLA RUEHLH RUEHMRE RUEHPW RUEHROV RUEHSR
DE RUEHTA #1849 2670840
ZNY CCCCC ZZH ZFR
O R 230840Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE
INFO RUCNCLS/SCA COLLECTIVE
RUCNOSC/OSCE POST COLLECTIVE

C O N F I D E N T I A L ASTANA 001849 
 
THIS MESSAGE IS BEING RECALLED AND/OR CANCELLED 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM KIRF PGOV KZ
SUBJECT: KAZAKHSTAN - RELIGION LAW AMENDMENTS HEADED TOWARD 
C O N F I D E N T I A 
L ASTANA 001849 
------------------------------------ 
TEXT OF MISSING 
SECTION 01 GOES HERE 
------------------------------------ 
 
CLASSIFIED BY: SVCSMARTMFI 
 
DE RUEHTA #1849 2661138 
ZNY CCCCC ZZH ZFR 
O 221138Z SEP 08 
FM AMEMBASSY ASTANA 
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3376 
INFO RUCNOSC/OSCE POST COLLECTIVE 
RUCNCLS/SCA COLLECTIVE 
C O N F I D E N T I A L ASTANA 001849 
 
SIPDIS 
 
E.O. 12958: DECL: 09/22/2018 
TAGS: PHUM KIRF PGOV KZ
SUBJECT: KAZAKHSTAN - RELIGION LAW AMENDMENTS HEADED TOWARD 
C O N F I D E N T I A L ASTANA 001849 
------------------------------------ 
TEXT OF MISSING SECTION 01 GOES HERE 
------------------------------------ 
SECOND MAZHILIS READING 
 
ZFR ZFR ZFR ZFR 
 
MILAS 
To view the entire SMART message, go to URL http://repository.state.sgov.gov/_layouts/OSS SearchResults.aspx?k=messageid:a64aee71-e1d9- 47bf-a659-c20d98dd816f

Wikileaks

08ASTANA1819, KAZAKHSTAN’S SENATE ELECTIONS NOT REALLY A TEST

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Reference ID Created Released Classification Origin
08ASTANA1819 2008-09-19 11:58 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO6804
PP RUEHBI RUEHCI RUEHFL RUEHLA RUEHLH RUEHMRE RUEHPW RUEHROV RUEHSR
DE RUEHTA #1819/01 2631158
ZNY CCCCC ZZH
P 191158Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3348
INFO RUCNOSC/OSCE POST COLLECTIVE
RUCNCLS/SCA COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001819 
 
SIPDIS 
 
E.O. 12958: DECL: 09/19/2018 
TAGS: PGOV PHUM KDEM KZ
SUBJECT: KAZAKHSTAN'S SENATE ELECTIONS NOT REALLY A TEST 
CASE FOR DEMOCRACY 
 
SUMMARY 
------- 
 
1.  (SBU) Kazakhstan's Senate elections will take place on 
October 4, when local and regional maslikhats (legislatures) 
will vote to fill 16 Senate seats. The government has 
launched a wide media campaign to raise the profile of these 
usually low-key elections and has invited international 
organizations and foreign missions to "observe" them.  The 
maslikhats are dominated by the ruling Nur Otan party, so 
there is little doubt that it will emerge as a landslide 
winner.  The opposition refuses to participate in an election 
in which it maintains the results are "predetermined." Only 
one opposition party, Ak Zhol -- a party shunned by the other 
opposition parties -- has a candidate in the running. 
Election monitoring NGOs are also skeptical that the 
elections will bring any surprise results.  End Summary. 
 
SENATE ELECTION CAMPAIGN LAUNCHED 
---------------------------------- 
 
2.  (U) September 14 marked the beginning of the campaign 
season for elections to Kazakhstan's Senate, the upper house 
of parliament.  The elections are scheduled for October 4, 
when regional and local maslikhats (legislatures) will gather 
in separate regional conferences to vote on filling 16 Senate 
seats.  The Senate consists of 47 Senators: 15 are directly 
appointed by the President and 32 are elected by the 
maslikhats, with two of these 32 Senate seats reserved for 
each of country's fourteen oblasts and two for each of its 
two largest cities, Astana and Almaty (which are administered 
separately from the oblasts). 
 
3. (U) Candidates for Senate seats are either nominated by 
the maslikhats, or put their candidacies forward 
independently.  Those who clear the registration process 
receive public financing (approximately $2,000 per candidate) 
and are guaranteed access to the media.  The system does not 
make it easy for individuals with declared opposition-party 
affiliation to complete, as party-affiliated contenders can 
only get on the ballot through nomination by a maslikhat, all 
of which are dominated by the ruling Nur Otan party.  Of 88 
candidates who initially declared their candidacies, 50 
managed to get registered.  Of these 50, 21 are members of 
Nur Otan, 16 claim to be independents, and 12 opted not to 
declare a party affiliation.  One candidate is from Alikhan 
Baimenov's Ak Zhol party -- a party which claims to be in the 
opposition but which other opposition parties consider to be 
part of the government's "pocket opposition."  Ak Zhol's 
candidate was apparently nominated by an maslikhat in 
Kostanai oblast. 
 
DEMOCRATIC TEST CASE ... 
------------------------ 
 
4. (U) While the Senate elections usually garner little 
notice, this time the government is keen to raise their 
profile.  In an extensive interview with the newspaper Litr 
on September 13 under the headline "Test Case Elections," the 
Central Election Commission (CEC) chairman Kuandyk 
Turgankulov stressed that these are the last elections before 
Kazakhstan's 2010 OSCE chairmanship and that they must take 
place "in strict accordance with national legislation."  The 
CEC organized several training sessions for prospective 
candidates, and television and print media have been filled 
with extensive stories on the electoral process and 
interviews with sitting Senators.  The ruling Nur Otan party 
went so far as to hold primaries to pick its candidates, 
although critics pointed out that the primary process is much 
better suited for direct elections, like those for the 
Majilis, parliament's lower house.  To underline the openness 
and fairness of the upcoming contest, the government invited 
international organizations, NGOs, and foreign governments 
(including the U.S.) to send election "observers" on October 
4. 
 
... OR POLITICAL THEATER? 
------------------------- 
 
5.  (U) The opposition parties, predictably, are quite 
cynical about the fairness and transparency of the upcoming 
elections.  The major opposition parties have declared that 
they will not participate in what OSDP leader Zharmakhan 
Tuyakbay called "the forthcoming farce."  Tuyakbay told the 
press that the results of the election are "predetermined" by 
the fact that 85 percent of regional and local maslikhat 
members are from "the one and only Nur Otan party."  "The 
system does not allow for any result other than a 100 percent 
victory for the ruling party," he contended, "and OSDP does 
not intend to give a veneer of competition" to the elections. 
 Communist Party leader Serikbolsyn Abdildin and Azat party 
 
ASTANA 00001819  002 OF 002 
 
 
head Bulat Abilov declared that they have no intention to 
spend time and money on elections they are certain to loose. 
Their decision was criticized by some political observers as 
a lost opportunity to at least publicize their ideas and 
party platforms. 
 
6.  (SBU) Civil society leaders are also pessimistic that the 
upcoming contest will, as the government hopes, showcase &
#x000A;Kazakhstan's democratic development.  Taskyn Rahimbekova, 
head of the Republican Network of Independent Monitors, told 
us that while her organization plans to monitor the 
elections, she has "little doubt" of the results.  She 
believes it unlikely that Nur Otan maslikhat members will 
buck the party and vote for candidates not pre-approved by 
the party leadership.  The sudden fury of activity around the 
elections is "nothing more than a show, staged to enhance Nur 
Otan's positive image," she said. 
 
COMMENT 
------- 
 
7.  (C) There seems to be little justification for the 
"election fever" the government is trying to stoke.  Since 
the Senators will be selected by an "electorate" dominated 
Nur Otan legislators, there is no uncertainty as to who will 
emerge the winner.  In this context, public election 
campaigns and blitz educational outreach make little sense. 
These are the last scheduled elections before 2010, however, 
and it appears that some in the government have decided that 
this is nevertheless a chance to showcase the electoral 
process in Kazakhstan.   End Comment. 
MILAS

Wikileaks

08ASTANA1816, KAZAKHSTAN: 2009 RHYTHM ROADS REQUEST

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Reference ID Created Released Classification Origin
08ASTANA1816 2008-09-19 09:51 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6671
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1816 2630951
ZNR UUUUU ZZH
R 190951Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3345
INFO RUCNCIS/CIS COLLECTIVE 0641

UNCLAS ASTANA 001816 
 
SIPDIS 
 
ECA FOR COLOMBIA BARROSSE AND BOB KEITH 
SCA/PPD FOR MERRIE BLOCKER AND JESSICA PFLEIDERER 
 
E.O. 12958: N/A 
TAGS: KPAO KZ
SUBJECT: KAZAKHSTAN: 2009 RHYTHM ROADS REQUEST 
 
1.  Embassy Astana wishes to request American musicians through the 
Rhythm Road program in 2009.  Post's application is keyed to the 
questions outlined in State 90853. 
 
--Preferred Music Style:  American roots music (country western or 
bluegrass) 
 
--Preferred Timeframe:  Spring 2009, March-April (first choice) or 
January-February (second choice).  We have no black out dates.  A 
visit during Kazakhstan's long winter months would generate 
particularly good audience turnout. 
 
--Priority Objectives:  The preservation and promotion of 
traditional music is a visible part of Kazakhstan's effort to build 
a modern nation with a strong sense of history and national 
identity.  By exposing Kazakhstani audiences to our cultural 
heritage through American roots music, we will increase 
U.S.-Kazakhstani understanding.  There are similarities between 
instruments traditionally used in American roots music, such as the 
guitar and fiddle, and traditional Kazakh instruments, such as the 
dombra and kylkobyz.  Both musical traditions also share some 
similar themes, such as the importance of wide open spaces. 
 
--Audiences:  USG alumni recently approached us to express a 
particular appreciation for this type of music and an interest in 
sharing it with a wider Kazakhstani audience.  In addition to USG 
alumni, our target audience would also include music students, 
professors, and the Kazakh-speaking general public.  We have 
previously hosted a number of very well received jazz and classical 
musicians, but have not exposed Kazakhstani audiences to American 
roots music. 
 
--Possible Venue Institutions:  The National Academy of Music 
(Astana), Zhastar Palace (Astana), Conservatoire (Almaty), 
Baiseitova and Zhubanova music schools (Almaty), Museum of Musical 
Instruments (Almaty), Music College (Aktobe), West Kazakhstan Folk 
Orchestra (Uralsk), Music School (Uralsk).  All of the music schools 
mentioned above have faculties that specialize in traditional Kazakh 
music.  We would also consider organizing a joint concert with the 
national Kazakh ensemble "Magic of Nomads," the first Kazakh group 
to record an album at London's Abbey Road studio 
(www.magicofnomads.kz) 
 
--Possible Venue Cities: Astana, Almaty, Aktobe, Uralsk. 
 
--Security:  Kazakhstan is a stable country; we do not anticipate 
any particular security concerns. 
 
Milas

Wikileaks

08ASTANA1815, KAZAKHSTAN – WORKING GROUP SUBMITS RECOMMENDATIONS ON

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Reference ID Created Released Classification Origin
08ASTANA1815 2008-09-19 09:47 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6669
OO RUEHAST RUEHBI RUEHCI RUEHFL RUEHLA RUEHLH RUEHMRE RUEHPOD RUEHPW
RUEHROV RUEHSR
DE RUEHTA #1815 2630947
ZNR UUUUU ZZH
O 190947Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3344
INFO RUCNOSC/OSCE POST COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS ASTANA 001815 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM PGOV KDEM OSCE KZ
SUBJECT:  KAZAKHSTAN - WORKING GROUP SUBMITS RECOMMENDATIONS ON 
MEDIA LAW AMENDMENTS TO JUSTICE MINISTRY 
 
Summary 
------- 
 
1. (SBU) The Information and Culture Ministry's working group on 
amendments to Kazakhstan's media law has forwarded a "concept" for 
the amendments and nine specific proposals to the Ministry of 
Justice for further action.  Two NGOs that participated in the 
working group complained to us that the nine proposals were all made 
by the government, and that the government rejected every proposal 
submitted by NGOs.  They further maintained that the nine proposals 
were largely superficial and technical, rather than substantive. 
End Summary. 
 
"Concept" Plus Nine Specific Proposals 
-------------------------------------- 
 
2. (U) The Information and Culture Ministry's working group on 
amendments to Kazakhstan's media law held its third session on 
September 17.  Representatives of several government agencies and 
six media-related NGOs -- including Adil Soz and Internews -- 
participated in the meeting.  At a follow on press conference, 
Information and Culture Ministry Executive Secretary Zhanna 
Kurmangaliyeva announced that the working group had reached a 
"consolidated position," agreeing on an overall "concept" for the 
media law amendments, as well as on nine specific proposals.  She 
said the "concept" and the specific proposals would be passed on to 
an inter-agency committee at the Ministry of Justice -- which will 
be responsible for drafting the actual package of legislative 
amendments. 
 
3. (U) The nine specific proposals that were agreed to cover a range 
of issues.  One would put plaintiffs and defendants on an equal 
legal footing in libel cases -- a change from current law under 
which a defendant must prove that an allegedly libelous false story 
is actually true.  A second would eliminate a requirement that a 
media outlet re-register when it changes its office address or 
replaces its editor-in-chief.  A third would annul a provision of 
current law requiring a journalist to obtain an interviewee's prior 
consent for audio or video recording of an interview.  Yet another 
proposal would provide additional means for journalists to appeal 
the refusal of public officials to respond to their queries. 
 
No "Consolidated Position" 
-------------------------- 
 
4. (SBU) Adil Soz head Tamar Kaliyeva told us on September 18 that 
the "concept" for the amendments was a good one, but she rejected 
Kurmangaliyeva's characterization that the working group had 
achieved a "consolidated position."  She explained that the nine 
specific proposals that were agreed to were all made by the 
government, and that the government representatives had rejected 
every proposal made by NGOs -- including ones recommending (1) 
"automatic registration" of media outlets upon filing the necessary 
paperwork with the government; (2) lower registration fees; and (3) 
elimination of the bar on foreigners serving as editors-in-chief of 
media outlets. 
 
5. (SBU) Internews country director Oleg Katsiyev maintained to us 
on September 19 that the nine agreed-to proposals were largely 
superficial and technical, rather than substantive.  He complained 
that reporters did not publish his remarks at the September 17 press 
conference criticizing the results of the working group's efforts. 
While Kurmangaliyeva had promised that the working group would, in 
fact, continue to meet to discuss further recommendaions, Katsiyev 
was skeptical that this would be the case. 
 
6. (SBU) The OSCE was not invited to participate in the working 
group, and has not attended any of its three sessions.  OSCE Astana 
Political Officer Valeriu Chiveri told us on September 19 that the 
OSCE did, however, provide funds to Almaty-based Adil Soz and 
Internews so that they could travel to Astana for the meetings of 
the working group.  Chiveri said his office had not yet obtained a 
copy of the agreed-to "concept" and specific proposals, but hoped to 
in the coming days, and would subsequently meet with Adil Soz and 
Internews to discuss them. 
 
Comment 
------- 
 
7. (SBU) We are not surprised that the proposals the government was 
willing to approve fell far short of what the leading NGOs wanted. 
Our focus should now shift to influencing the draft package of 
amendments that will come of the Justice Ministry's inter-agency 
committee -- ideally, in a coordinated effort with our like-minded 
European partners.  We should also press the government to agree to 
submit the draft package to ODIHR for analysis and review before the 
package is presented to parliament for consideration.  End Comment. 
 
 
MILAS

Wikileaks

08ASTANA1808, KAZAKHSTAN – WHEAT EXPORTS AN IMPORTANT ISSUE IN

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Reference ID Created Released Classification Origin
08ASTANA1808 2008-09-17 11:37 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO4727
RR RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHTA #1808/01 2611137
ZNY CCCCC ZZH
R 171137Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3336
INFO RUCNCIS/CIS COLLECTIVE 0639
RUCNCLS/SCA COLLECTIVE
RUEHEG/AMEMBASSY CAIRO 0085

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001808 
 
SIPDIS 
 
E.O. 12958: DECL: 09/17/2018 
TAGS: PREL EAGR PTER KZ EG
SUBJECT: KAZAKHSTAN - WHEAT EXPORTS AN IMPORTANT ISSUE IN 
RELATIONSHIP WITH EGYPT 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
------- 
Summary 
------- 
 
1. (C) According to the Egyptian Embassy, Kazakhstani wheat 
exports to Egypt are an important issue in Kazakhstan-Egypt 
bilateral relations and were a main topic of discussion for 
the August 29 visit to Astana of Egyptian Trade and Industry 
Minister Rachid Mohamed Rachid.  Egypt is interested in 
increasing pharmaceutical exports to Kazakhstan, but faces 
bureaucratic hurdles.  Egypt expects to send Religious 
Endowments (Awqaf) Minister Zakzouk to the October 17 Common 
World Forum ministerial meeting.  The Egyptians are only 
"passively" participating in Nazarbayev's Conference on 
Interaction and Confidence Building Measures in Asia (CICA). 
Several hundred Kazakhstanis are studying in Egypt; some have 
been deported back to Kazakhstan for alleged involvement with 
Wahabi groups.  End Summary. 
 
--------------------------------------------- ----- 
Wheat:  A Key Issue in Kazakhstan-Egypt Relations 
--------------------------------------------- ----- 
 
2. (SBU) In a September 8 meeting, Egyptian Embassy Second 
Secretary Mohamed Salah Keshtah discussed with poloffs the 
Kazakhstan-Egypt bilateral relationship, as well as the 
August 29 visit to Astana of Egyptian Trade and Industry 
Minister Rachid Mohamed Rachid.  Egypt-Kazakhstan bilateral 
trade rose significantly in 2008 -- exceeding $233 million 
for the first five months of the year, in comparison with 
trade turnover for all of 2007 of just $76 million.  Keshtah 
explained to poloffs that Egypt's imports of Kazakhstani 
wheat are the most important component of bilateral trade, 
and securing more wheat from Kazakhstan had been a principal 
aim of the visit of Minister Rachid, who had meetings with 
President Nazarbayev, Prime Minister Masimov, and Foreign 
Minister Tazhin. 
 
3. (SBU) During the Rachid visit, Nazarbayev said publicly 
that with the lifting of Kazakhstan's wheat export ban, 
Kazakhstan would  export 1,000,000 tons of wheat to Egypt in 
2008 -- up from 329,000 tons in 2007.  However, according to 
Keshtah, the exact amount for 2008 is still under negotiation 
and will depend on Kazakhstan's overall wheat harvest.  He 
expects that in the end, the actual amount will be between 
500,000 and 700,000 tons, not 1,000,000 tons.  Poloffs asked 
Keshtah about reports that some countries -- for example, 
Saudi Arabia -- are trying to secure arable land for growing 
agricultural products in countries such as Kazakhstan. 
Keshtah admitted that such an arrangement had been discussed 
between Egypt and Kazakhstan, but said that the logistical 
issues proved so overwhelming that no agreement could be 
reached. 
 
--------------------------------------------- ------ 
Registration Process Hampers Pharmaceutical Exports 
--------------------------------------------- ------ 
 
4. (C) Keshtah told poloffs that Egypt is exporting 
approximately $4 million of pharmaceuticals to Kazakhstan 
annually and sees this as a potential growth area, especially 
given that pharmaceutical production costs are much lower in 
Egypt than in Kazakhstan.  However, Kazakhstan's complex 
pharmaceutical registration process is a barrier to 
increasing Egyptian exports.  Egyptian Health and Population 
Minister Hatem Mostafa El-Gabaly may visit Kazakhstan soon to 
discuss, among other things, pharmaceutical trade issues. 
(Note:  El-Gabaly's potential visit is also connected to an 
upcoming conference in Egypt on avian influenza.  Kazakhstan, 
which has a biotechnology center that claims to have 
discovered a vaccination for avian influenza, is expected to 
be an active participant at the conference.  End Note.) 
 
--------------------------------- 
Late Notice on Common World Forum 
--------------------------------- 
 
5. (C) Keshtah noted that Foreign Minister Tazhin has asked 
for high-level Egyptian government representation at the 
October 17 ministerial meeting of the Common World Forum, a 
Nazarbayev initiative aimed at encouraging dialogue between 
the West and the Muslim world.  According to Keshtah, the 
Egyptian plan is to send Religious Endowments (Awqaf) 
Minister Mahmoud Hamdy Zakzouk, as well as a deputy minister 
of culture.  Keshtah voiced frustration that the Egyptian 
Embassy had received very late notice about the August 28-29 
Common World Forum senior officials meeting, which overlapped 
with Rachid's visit.  He said he had not had enough time to 
 
ASTANA 00001808  002 OF 002 
 
 
have Egyptian government legal experts review the proposed 
text for the Common World Forum's final communique (the 
so-called "Astana Declaration.")  Keshtah said Egypt hoped to 
find compromise language, particularly for the two paragraphs 
still in brackets (regarding the Alliance of Civilizations 
and women's rights) about which the United States has 
expressed concerns. 
 
----------------------- 
Concerns Regarding CICA 
------------------------ 
 &#x000
A;6.  (C) Poloffs asked Keshtah about Egypt's role in the 
Conference on Confidence Building Measures and Interaction in 
Asia (CICA), another Nazarbayev initiative, which held a 
ministerial meeting in Almaty on August 25. (Note: Egypt is a 
CICA member state; the United States holds CICA observer 
status.  End Note.) Keshtah said that India is far more 
active in CICA than Egypt, and maintained that the countries 
most active in CICA are each using the forum to pursue their 
own independent objectives.  Several years ago, Egypt raised 
objections regarding some of the issues under consideration 
by CICA, but the Kazakhstanis did not take these concerns 
into account, Keshtah claimed.  As a result, Cairo had 
instructed the Egyptian Embassy in Kazakhstan to attend CICA 
activities, but to "participate passively." 
 
------------------------------- 
Plans for Egyptian Culture Week 
------------------------------- 
 
7.  (SBU) Education and culture are also important issues in 
the Kazakhstan-Egypt bilateral relationship, according to 
Keshtah.  As an example of strong cultural and educational 
ties between the two countries, Keshtah mentioned the 
Egyptian-Kazakh Nour Mubarak University in Almaty, which 
teaches secular subjects and "religion in a moderate way." 
The university is currently in the process of opening a large 
new building.  The Egyptian Embassy, which recently moved to 
Astana from Almaty several months ago, is also planning to 
hold an Egyptian Culture Week.  Activities, including 
Egyptian movie screenings, folk-dance performances and 
exhibits by Egyptian artists, will take place for three days 
each in Astana and Almaty.  President Nazarbayev has great 
respect for Egyptian culture, Keshtah maintained, and had 
once sent his personal airplane to Egypt to fly the head of 
the Al-Azhar foundation to Kazakhstan for a visit.  Keshtar 
also noted that Kazakhstan and Egypt had co-funded activities 
connected to Sultan Baibars.  (Note:  Baibars, a Kipchak Turk 
from the Kazakh steppe, was a Mameluke Sultan of Egypt and 
Syria in the 13th century.  Following Nazarbayev's March 2007 
visit to Egypt, the press reported that Kazakhstan was also 
considering spending one million dollars to help complete the 
restoration of the Sultan Baibars Mosque in Cairo.  End Note.) 
 
---------------------------------------- 
Kazakhstani Students Deported from Egypt 
---------------------------------------- 
 
8.  (C) Keshtah told poloffs that at present, approximately 
400 students from Kazakhstan are studying at Egyptian 
universities on scholarships.  He said that the Egyptian 
government has deported some Kazakhstani students, along with 
students from other Central Asian universities, because of 
their purported involvement in Wahabi-style groups.  While 
Keshtah maintained that none of the Kazakhstani students had 
been linked to terrorist cells, he noted that some 
Kazakhstani students were susceptible to Wahabi-style groups, 
whose activities the Egyptian government does not find 
acceptable. 
MILAS

Wikileaks

08ASTANA1807, KAZAKHSTAN – POLL INDICATES PUBLIC SYMPATHIES ARE WITH

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Reference ID Created Released Classification Origin
08ASTANA1807 2008-09-17 11:20 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4730
PP RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1807/01 2611120
ZNR UUUUU ZZH
P 171120Z SEP 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3334
INFO RUCNCIS/CIS COLLECTIVE 0637
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHAST/USOFFICE ALMATY 0738
RUEHVEN/USMISSION USOSCE 1944

UNCLAS SECTION 01 OF 02 ASTANA 001807 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PINR SOCI KZ GG RS
SUBJECT:  KAZAKHSTAN - POLL INDICATES PUBLIC SYMPATHIES ARE WITH 
SOUTH OSSETIA AND RUSSIA, NOT WITH GEORGIA 
 
ASTANA 00001807  001.2 OF 002 
 
 
1. (U) Summary:  The results of an opinion poll indicate that the 
Kazakhstani public has largely adopted the South Ossetian and 
Russian viewpoint with respect to the conflict in Georgia.  Overall, 
40.2 percent of poll respondents sympathized most with the South 
Ossetians, compared to just 2.7 percent with the Georgians.  At the 
same time, 39.4 percent considered Georgia's military action to 
constitute a "crime against humanity," while just 5 percent viewed 
what Georgia did as a move against separatism.  Approximately 50 
percent of the respondents agreed that Russia's intervention was 
justified, while only 9 percent saw Russia's actions as aggression 
against an independent country.  Astana residents were notably less 
supportive of the South Ossetians and Russians than residents of 
other regions.  End Summary. 
 
2. (U) Kazakhstan's Association of Sociologists and Political 
Scientists (ASIP) conducted a nationwide public opinion survey on 
the South Ossetia conflict during August 22-30, disseminating the 
results in a September 15 press release.  (Note:  Russia's 
recognition of South Ossetia and Abkhazia's independence occurred 
midway through the polling process, on August 26.  End Note.)  ASIP 
surveyed 2895 residents of 16 cities and 14 rural district centers 
-- a sampling it termed to be representative of the population as a 
whole.  ASIP reported overall survey results, as well as results by 
region for Astana and Almaty and for northern, southern, central, 
eastern, and western Kazakhstan. 
 
3. (U) Asked which side in the conflict was "in the right", 34.2 
percent of those polled responded South Ossetia and just 3.4 percent 
Georgia, while 33.8 percent maintained that both sides were in the 
right and 26.8 percent found the question "too difficult to answer." 
 In response to a second question, 40.2 percent said they 
"sympathized" with the South Ossetians, just 2.7 percent with the 
Georgians, 19 percent with both sides, and 17.8 percent with 
neither; 26.8 percent found this question too difficult to answer. 
 
 
4. (U) Nationwide, 39.4 percent of those polled agreed that 
Georgia's military action constituted "a crime against humanity" 
leading to the deaths of innocent civilians, while 5 percent 
considered Georgia's response to be a "battle agQ separatism;" 
the remainder were unable to chose between these two options. 
Approximately 50 percent maintained that Russian intervention in the 
conflict was justified "to end military action in the conflict 
zone," while 9 percent disagreed, seeing Russia's actions as 
"aggression against an independent country."  Just over 39 percent 
of those polled found this question too difficult to respond to. 
 
 
5. (U) Asked about the way to resolve the conflicts in both South 
Ossetia and Abkhazia, 27 percent of those polled said the two 
regions should become independent, 12.3 responded that they should 
be joined to Russia, and less than 2 percent said they should remain 
within Georgia.  Approximately 13 percent believed that the 
conflicts could not be resolved, while 43Qcent found this 
question too difficult to answer. 
 
6. (U) The pollsters did not report results by ethnicity of 
respondent.  However, results reported by region indicate that the 
views of ethnic Kazakhs and those of ethnic Russians are in relative 
alignment, as the results for ethnic Kazakh-dominated southern and 
western Kazakhstan did not significantly diverge from those of 
heavily Russian northern, central, and eastern Kazakhstan.  The main 
outlier in the survey was Astana, with residents of the capital 
refusing to answer the questions at a much higher rate than 
residents of other regions and demonstrating less sympathy toward 
the South Ossetian and Russian positions.  For example, just 15.1 
percent of Astana respondents considered Georgia's military action 
to be "a crime against humanity; in the remaining regions, from 37.7 
percent (eastern Kazakhstan) to 43.0 percent (central Kazakhstan) of 
respondents saw the situation this way.  (Note:  Just under 80 
percent of Astana respondents completely declined to answer this 
question, compared with 39 percent nationwide.  End Note.)  Among 
Astana respondents, only 28.6 percent considered Russia's 
intervention to be justified; in the other regions, from 42.4 
percent (eastern Kazakhstan) to 58.0 percent (central Kazakhstan) 
saw Russia's actions as justified. 
 
7. (U) Just 7.1 percent of Astana residents viewed independence for 
South Ossetia and Abkhazia as the solution to the two conflicts.  By 
comparison, 16.5 percent of respondents in eastern Kazakhstan saw 
this as the solution, while from 25.9 percent to 33.8 percent of the 
residents of the remaining five regions agreed with this view. 
(Note:  The fact that respondents in ethn
ic Russian-dominated 
eastern Kazakhstan were less sympathetic to the South Ossetian and 
Russian perspective on several questions than respondents nationwide 
is somewhat of a conundrum to us.  This may indicate a flawed 
polling methodology for that region.  End Note.) 
 
 
ASTANA 00001807  002.2 OF 002 
 
 
8. (SBU) Comment:  The overall polling results are not entirely 
surprising.  Most Kazakhstanis are getting their news about the 
South Ossetia situation from the Russian media, while very few are 
relying on western sources.  Moreover, while the Kazakhstani 
government has given no public support to Russia on its recognition 
of South Ossetia and Abkhazia, President Nazarbayev has agreed with 
the Russians that the Georgians started the conflict and that Russia 
was justified in intervening to stop the bloodshed.  Nevertheless, 
we still would have expected somewhat more sympathy for the Georgian 
perspective, especially among ethnic Kazakhs.  The fact that the 
poll included some questions that may not have been up to U.S. 
polling standards may have skewed the results.  That Astana was an 
outlier in the poll - with its residents expressing less sympathy 
for the South Ossetian and Russian perspectives -- confirms our 
sense that the country's governing elite, protective of Kazakhstan's 
own independence, viewed Russia's military intervention in the 
conflict with genuine concern.  End Comment. 
 
MILAS

Wikileaks

08ASTANA1805, EXBS KAZAKHSTAN ADVISOR’S MONTHLY REPORTING CABLE (AUGUST

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Reference ID Created Released Classification Origin
08ASTANA1805 2008-09-17 08:24 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO4558
RR RUEHAST
DE RUEHTA #1805/01 2610824
ZNR UUUUU ZZH
R 170824Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3330
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSJGA/COMDT COGARD WASHINGTON DC
RUEKJCS/SECDEF WASHDC 0119
RUEKJCS/JCS WASHDC 0056
RUCQAAA/USCINCCENT MACDILL AFB FL
RUEHRL/AMEMBASSY BERLIN 0487
RUEHEK/AMEMBASSY BISHKEK 8332
RUEHNT/AMEMBASSY TASHKENT 8196
RUEHKB/AMEMBASSY BAKU 0055
RUEHDBU/AMEMBASSY DUSHANBE 2395
RUEHAH/AMEMBASSY ASHGABAT 7353
RUEHAST/USOFFICE ALMATY 0736

UNCLAS SECTION 01 OF 02 ASTANA 001805 
 
SIPDIS 
 
DEPT FOR ISN/ECC YWONG, ACHURCH, JHARTSHORN, SROBINSON 
DEPT FOR ISN/ECC-AMT LSPRINGER 
DEPT FOR EUR/ACE DFISCHER 
DEPT FOR SCA/RA JSPILSBURY 
DEPT FOR SCA/CEN MO'MARA 
CBP/INA FOR SBAKER AND BPICKETT 
USDOE/NNSA CWALKER, TPERRY AND EDESCHLER 
DOC FOR DCREED 
USCG FOR SHABETIMICHAEL 
AMEMBASSY BERLIN FOR CUSTOMS ATTACHE 
AMEMBASSY TASHKENT, BISHKEK, BAKU, DUSHANBE AND ASHGABAT FOR EXBS 
ADVISORS 
 
E.O. 12958: N/A 
TAGS: ETTC MNUC PARM PREL KSTC KNNP KZ
SUBJECT: EXBS KAZAKHSTAN ADVISOR'S MONTHLY REPORTING CABLE (AUGUST 
2008) 
 
I. BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY MANAGERS: 
 
1. On August 7, 2008, a U.S. Senate delegation lead by Nevada 
Senator (and Senate Majority Leader) Harry Reid visited Kazakhstan 
as part of a multi-country trip.  Other senators making the trip 
included Jeff Bingaman (D-NM), Bill Nelson (D-FL), Johnny Isakson 
(R-GA), and Bob Menendez (D-NJ). 
 
2.  On August 7, 2008, a meeting of the Kazakhstan interdepartmental 
border security group was held at which it was announced that 
preparations are underway for the demarcation of the 6,846 kilometer 
border between Russia and Kazakhstan. Demarcation envisages the 
creation of the full-fledged border infrastructure, including 
settling issues of building border checkpoints and placing border 
signs.  Demarcation will start in the Astrakhan region in early 2009 
and will move along the Russia-Kazakhstan border from west to east. 
 
 
3. On August 5, 2008, the ratified agreement between Kazakhstan and 
Kyrgyzstan which is the legal basis for the demarcation of the 1,051 
kilometer Kazakhstan-Kyrgyzstan state border took effect. The 
presidents of Kazakhstan and Kyrgyzstan signed a border treaty on 
December 15, 2001. 
 
II. COMPLETED ACTIONS FOR THE REPORTING PERIOD 
 
A. SITE ASSESSMENTS AND MEETINGS CONDUCTED 
 
1. On August 1, 2008, the EXBS advisor attended a special country 
team briefing held for Lieutenant General Martin E. Dempsey, Acting 
Commander of the U.S. Central Command (CENTCOM).  The EXBS advisor 
gave a presentation on EXBS activities in Kazakhstan. 
 
2. On August 11, 2008, a meeting was held with Deputy Chief of 
Mission Kevin Milas to discuss an incoming letter from the Acting 
Chairman of the Kazakhstan Customs Control Committee requesting 
assistance from U.S. Customs and Border Protection on a wide range 
of Customs related issues.  In response to this request, EXBS has 
reached out to U.S. Customs and Border Protection and will attempt 
to arrange a meeting in Astana during the late October or early 
November timeframe. 
 
3. On August 19, 2008, the EXBS Advisor attended a special country 
team meeting conducted with Lieutenant General James J. Lovelace, 
Commanding General U.S. Army Central (USARCENT).  During this 
meeting the EXBS advisor gave a presentation on EXBS activities in 
Kazakhstan. 
 
4. On August 21, 2008, the EXBS advisor participated in an Embassy 
Astana Security Assistance Working Group (SAWG) meeting.  Among the 
topics discussed was the status of the Second Line of Defense 
efforts in installing radiation portal monitors in Kazakhstan, the 
status of the Customs Control Committee's $62 million dollar 
modernization program, and the Customs Control Committee's letter to 
the Deputy Chief of Mission requesting assistance of U.S. Customs 
and Border Protection. 
 
5. On August 28, 2008, the EXBS team met in Astana with Tracy 
Mustin, Director, DOE Second Line of Defense (SLD) Program.  During 
this meeting Laurel Cotton, the Project Coordinator for the SLD 
Program, introduced a new contractor, Tetra-Tech Inc., which is part 
of a team led by SES-Tech Global Solutions of Bellevue, Washington. 
Contractor representatives at this meeting included Randal Roberts, 
Vice President, Donald Hawkins, Contracts Manager, and Michael 
Hoxie, Supervising Project Manager.  SES-Tech will be used to 
complete phase two of the SLD project in Kazakhstan. 
 
ASTANA 00001805  002 OF 002 
 
 
 
6. On August 28, 2008, the EXBS advisor met with Nicholas Pokrovsky, 
International Services and Advisors Inc., and Tracy Mustin, the 
Director, SLD Program, on the proposal to engage Kazakhstan in the 
deployment of Mobile Detection Systems.  The objective of the Mobile 
Detection System (MDS) program is to establish and identify priority 
issues leading to an agreed upon list of needed equipment and a 
completely self-sustaining program that protects the partner country 
and other nations from the dangers of illicit traffic in nuclear and 
other radioactive material.
 As the result of this meeting, the EXBS 
Advisor provided a copy of the Law on the State Border, the Criminal 
Procedural Code, and the Law on Operational-Investigative Activity 
of the Republic of Kazakhstan to the Second Line of Defense Program, 
as requested. 
 
7. On August 29, 2008, Laurel Cotton, the Project Coordinator for 
the SLD Program, and representatives of SES-Tech Global Solutions 
met with Kazakhstan Customs Control Committee officials to discuss a 
broad range of matters concerning the implementation of the second 
phase of the SLD program in Kazakhstan.  During September 2008, site 
surveys will be conducted at the following 8 ports: Kurmangazy, 
Urlyutobe, Kairak, Korgas, Sipatai Batyr, the Tobol rail crossing, 
the Atyrau airport, and the Aktau seaport. 
 
B. TRAINING DURING THE REPORTING PERIOD 
 
1. From August 23-31, 2008, a United States Coast Guard Mobile 
training course on the search of high-capacity containers was given 
at the port of Aktau, Kazakhstan, to 14 Border Guard students.  This 
course was sponsored by the Office of Military Cooperation. 
 
C. EQUIPMENT DELIVERED DURING THE REPORTING PERIOD 
 
1.  From August 13-15, 2008, Elina Akhtiyarova, EXBS Assistant, 
accompanied technical specialist Steven Patton and Britain 
Groesbeck, Allied Technical Services, to Shymkent, Kazakhstan, for 
the salvage of X-ray van 220, and to Kordai, Kazakhstan, for the 
demounting of an X-ray system from van 215.  The work was conducted 
in the presence of the Chief Specialist of Fissile and Radiological 
Materials Control and Technical Means of the Customs Control 
Division, Major Zolotukhin. 
 
D. IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 
 
1.  None. 
 
E. SIGNIFICANT DEVELOPMENTS IN EXPORT CONTROLS, NONPROLIFERATION, OR 
RELATED BORDER SECURITY 
 
1.  None 
 
F. CASPIAN SECURITY INFORMATION 
 
1. None 
 
III. RED FLAG ISSUES. 
 
1. None 
 
MILAS

Wikileaks

08ASTANA1798, KAZAKHSTAN: ALMATY NOTES, SEPTEMBER 2 – 12, 2008

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Reference ID Created Released Classification Origin
08ASTANA1798 2008-09-16 09:54 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3724
RR RUEHAST
DE RUEHTA #1798 2600954
ZNR UUUUU ZZH
R 160954Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3321
INFO RUEHVEN/USMISSION USOSCE 1943
RUEHEK/AMEMBASSY BISHKEK 8331
RUEHNT/AMEMBASSY TASHKENT 8195
RUEHAH/AMEMBASSY ASHGABAT 7352
RUEHDBU/AMEMBASSY DUSHANBE 2394
RUEHMO/AMEMBASSY MOSCOW 1553
RUEHAST/USOFFICE ALMATY 0731

UNCLAS ASTANA 001798 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL KZ
SUBJECT: KAZAKHSTAN: ALMATY NOTES, SEPTEMBER 2 - 12, 2008 
 
1. The "Almaty Notes" series is intended to maintain focus on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital" following the move of the Embassy to 
Astana. 
 
Unique Protest 
-------------- 
 
2. The Talmas youth movement, a group of young activists, organized 
an original political protest against the ruling Nur Otan party on 
August 30, Kazakhstan's Constitution Day.  Satirizing devotion to 
President Nazarbayev, the group marched down one of the main streets 
of Almaty wearing sheep's masks and carrying posters that said in 
Latin "the king's will is the highest law."  In comments to the 
media, the participants referred to themselves as the "Nur Otar" 
movement -- "Otar" means "flock of sheep" in Kazakh -- and called on 
Nazarbayev to disband the Parliament as "a useless body."  "We have 
neither faces nor names," said one protestor, "Kazakhstani society 
should seek the same facelessness: only numbers, sheep number one, 
sheep number two, etc." 
 
3.  Police broke up the protest and detained participants for 
several hours.  On September 4, an Almaty administrative court 
sentenced the leader of the Talmas movement, noted civil society 
activist Aynur Kurmanov, to 15 days in jail for organizing a rally 
without proper authorization.  Three other protest participants were 
fined between 17,000 and 23,000 tenge (approximately $140 to $190). 
 
 
Libel Suits Against Opposition Newspaper Taszhargan 
------------------------------- ------------------- 
 
4. In August, a court ordered the opposition newspaper Taszhargan to 
publish a second retraction of an article that ostensibly defamed 
Beket Turgarayev, chairman of the North Kazakhstan oblast court. 
Turgarayev was allegedly not satisfied with a previous retraction 
published in May.   In addition to Turgarayev's suit, the paper is 
being sued for libel by parliamentarian Roman Madinov, two 
businessmen, and the head of a civil society organization. 
Taszhargan maintains that if the courts find the paper liable in any 
of these cases, it would not be able to cover the damage claims and 
would thus be forced to close. 
 
Masimov Tells Contractors to Speed Up 
------------------------------------- 
 
5. On September 8, Prime Minister Masimov visited several of the 
sites which will host the Asian Winter Games in Almaty in 2011.  He 
toured the Medeu skating rink and the Chimbulak ski resort.  Masimov 
asked contractors to step up their construction and renovation work, 
explaining that President Nazarbayev is not satisfied with the pace 
of their efforts. 
 
MILAS

Wikileaks

08ASTANA1774, KAZAKHSTANIS TELL NATO THEY WANT TO ENHANCE

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Reference ID Created Released Classification Origin
08ASTANA1774 2008-09-15 11:22 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO2903
PP RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHPW RUEHROV RUEHSR
DE RUEHTA #1774 2591122
ZNY CCCCC ZZH
P 151122Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3299
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SCA COLLECTIVE
RUEHNO/USMISSION USNATO 2235

C O N F I D E N T I A L ASTANA 001774 
 
SIPDIS 
 
E.O. 12958: DECL: 09/15/2018 
TAGS: PREL PGOV NATO KZ
SUBJECT: KAZAKHSTANIS TELL NATO THEY WANT TO ENHANCE 
AFGHANISTAN COOPERATION 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
1. (C) NATO Deputy Secretary General Claudio Bisogniero held 
meetings in Astana on September 11 with Defense Minister 
Akhmetov, Foreign Minister Tazhin, Security Council Secretary 
Suleymenov, and officials from the Ministry of Emergency 
Situations.  In a readout he gave to resident NATO-country 
ambassadors, Bisogniero explained that he had very positive 
meetings with his Kazakhstani government interlocutors that 
exceeded his expectations. 
 
2. (C) Bisogniero stressed to the ambassadors that his visit 
-- apparently the highest-level NATO visit to Kazakhstan ever 
-- was not connected to the Georgia conflict, but rather had 
been arranged before it.  He said that he had stressed three 
points in his meetings with the Kazakhstanis.  First, NATO 
views Kazakhstan as the key country in the Central Asia 
region.  Second, NATO looks forward to enhanced engagement 
with Central Asia, despite the events in Georgia.  Third, 
Kazakhstan can have good relations with both Russia and NATO. 
 This last point, Bisongiero maintained, helped dispel 
Kazakhstani misgivings. 
 
3. (C) Foreign Minister Tazhin told Bisongiero that 
Kazakhstan appreciated NATO's role in ensuring Afghan 
security and stability and is eager to become a stronger 
partner with NATO in Afghanistan.  Defense Minister Akhmetov 
said that Kazakhstan is willing to deploy two officers to 
ISAF headquarters in Afghanistan, as well as medics to a 
Slovak medical unit stationed there.  Akhmetov promised to 
assist in moving forward the NATO-Kazakhstan transit 
agreement for the Northern GLOC, which, he explained, fell 
under the purview of the Ministry of Transport and 
Communications, rather than the Ministry of Defense.  Tazhin 
expressed consternation at the fact that NATO hashed out a 
transit agreement with Russia first, and only approached 
Kazakhstan later.  This gave the misimpression that 
Kazakhstan did not want to be helpful on Afghanistan and had 
to be dragged along through a fait accompli between NATO and 
Russia. 
 
4. (SBU) Ministry of Emergency Situations officials told 
Bisogniero that they wanted increased cooperation with NATO's 
Euro-Atlantic Disaster Response Coordination Center (EADRCC). 
 They also requested NATO assistance in enhancing their 
capability to respond to oil rig disasters.  Bisogniero 
promised the Ministry that he would look into this. 
 
5. (SBU) Bisogniero reminded the NATO-country ambassadors 
that in June 2009, there would be meetings in Kazakhstan of 
the Euro-Atlantic Partnership Council (EAPC) Security Forum 
and the NATO Parliamentary Assembly.  These would be 
important opportunities to further increase NATO-Kazakhstan 
cooperation. 
MILAS

Wikileaks

08ASTANA1767, KAZAKHSTAN – BAKER HUGHES SAYS BUSINESS IS GOOD AND ABOUT

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Reference ID Created Released Classification Origin
08ASTANA1767 2008-09-12 07:06 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1518
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1767 2560706
ZNR UUUUU ZZH
O 120706Z SEP 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3294
INFO RUCNCIS/CIS COLLECTIVE 0635
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS ASTANA 001767 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EPET EINV PGOV KZ
SUBJECT:  KAZAKHSTAN - BAKER HUGHES SAYS BUSINESS IS GOOD AND ABOUT 
TO GET BETTER 
 
------- 
SUMMARY 
------- 
 
1. (SBU) Baker Hughes Country Director for Kazakhstan Don McKelvie 
and Houston-based Government Relations Director Jennifer Cutaia told 
the Ambassador on September 10 that their company's business in 
Kazakhstan is good and will likely get even better, once 
Tengizchevroil (TCO) completes construction and installation of new 
drilling rigs in about a year's time.  Baker Hughes intends to move 
its Kazakhstan headquarters to Aktau, is committed to local content, 
and has had some difficulties obtaining hazardous materials permits 
and work permits for expat staff, McKelvie and Cutaia explained. 
End Summary. 
 
------------------------------------ 
CHANGE IN DRILLING TACTICS AT TENGIZ 
------------------------------------ 
 
2. (SBU) Baker Hughes Country Director for Kazakhstan Don McKelvie 
and Houston-based Government Relations Director Jennifer Cutaia told 
the Ambassador on September 10 that their company's previous tax 
problems have all been resolved and a separate financial police 
investigation has concluded with no long-term implications for the 
company's work in Kazakhstan.  McKelvie said future business 
development opportunities in Kazakhstan are "enormous", particularly 
at Tengizchevroil (TCO), where Baker Hughes -- although not involved 
in current exploration and production activities -- recently 
responded to a tender for non-core and future generation development 
services.  McKelvie said that TCO is changing its drilling approach 
and will build onshore platforms and use extended, directional 
drilling technologies to lower costs and reduce its environmental 
footprint.  McKelvie indicated that due to the change in approach, 
TCO will not require new drilling services for another year. 
 
--------------------------------------- 
NEW DRILLING SERVICES FACILITY IN AKTAU 
--------------------------------------- 
 
3. (SBU) McKelvie told the Ambassador that Baker Hughes is building 
a new 25,000 square meter drilling and completion services facility 
in Aktau and will move its Kazakhstan headquarters there from Almaty 
once construction is complete.  Baker Hughes purchased the land for 
approximately $2 million and plans to invest approximately $30 
million to construct the facility. 
 
--------------------------- 
COMMITMENT TO LOCAL CONTENT 
--------------------------- 
 
4. (SBU) According to McKelvie and Cutaia, Baker Hughes has made a 
serious commitment to national content and local suppliers and is 
well within reach of its stated goal for Kazakhstanis to comprise 
90% of its staff.  McKelvie said that Baker Hughes offers up to 18 
months of formal training in Houston, Aberdeen, or Abu Dhabi for 
Kazakhstani petroleum engineers, which is followed by an intensive 
on-the-job training program.  He said that the company is satisfied 
with the performance of its local engineers, but admitted that Baker 
Hughes has had difficulty building local capacity among machine shop 
technicians.  (Note: As an oil services company, Baker Hughes is not 
subject to the national content requirements of oilfield production 
until it joins a production consortium.  Its high percentage of 
local national staff can therefore be a competitive advantage by 
making Baker Hughes an attractive partner for exploration and 
production companies.  End note). 
 
-------------------------------- 
SOME DIFFICULTY SECURING PERMITS 
-------------------------------- 
 
5. (SBU) McKelvie told the Ambassador that Baker Hughes continues to 
encounter difficulty securing permits for radioactive and explosive 
materials, as well as work permits for international staff, 
particularly those without a university degree who technically do 
not qualify for category three Kazakhstani work permits. The 
Ambassador expressed confidence that the work permit issue would 
resolve itself once Kazakhstan accedes to the World Trade 
Organization (WTO).  He reassured McKelvie and Cutaia that the 
Kazakhstani government is working diligently on WTO accession. 
 
ORDWAY

Wikileaks

08ASTANA1726, KAZAKHSTAN: DEMARCHE DELIVERED ON UNGA THIRD

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Reference ID Created Released Classification Origin
08ASTANA1726 2008-09-11 08:50 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0005
OO RUEHWEB

DE RUEHTA #1726 2550850
ZNY CCCCC ZZH
O 110850Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3253
INFO RUCNDT/USMISSION USUN NEW YORK 1896
RUEHGV/USMISSION GENEVA 0973

C O N F I D E N T I A L ASTANA 001726 
 
SIPDIS 
 
DEPARTMENT FOR IO/RHS AND DRL/MLGA 
 
E.O. 12958: DECL: 09/11/2018 
TAGS: PHUM PREL UN KZ
SUBJECT: KAZAKHSTAN: DEMARCHE DELIVERED ON UNGA THIRD 
COMMITTEE HUMAN RIGHTS PRIORITIES 
 
REF: A. STATE 95344 
     B. STATE 93981 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
1.  (C)  We delivered ref A/ref B points on UNGA Third 
Committee human rights priorities to Zhanar Kulzhanova, 
Counselor in the MFA's International Organizations 
Department, on September 10.  Kulzhanova agreed that the 
growing use of "no action motions" in the Third Committee was 
an issue.  She maintained, however, that this was not a sign 
that the G-77 and NAM countries did not care for human 
rights, but rather was a "reaction to the West's approach" of 
tabling the resolutions.  As she put it, many resolutions are 
"hammered out behind closed doors" and presented at the 
Committee "almost as ultimatums."  We stressed that our goal 
in reaching out to other countries prior to the session was 
to counter this misimpression and establish an ongoing 
dialogue.  On the question of thematic and country 
resolutions,  Kulzhanova told us that the Kazakhstani 
government was still formulating its positions. 
ORDWAY

Wikileaks

08ASTANA1724, KAZAKHSTAN – TWO STEPS FORWARD, ONE STEP BACK ON DOING

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Reference ID Created Released Classification Origin
08ASTANA1724 2008-09-11 08:31 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0420
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1724/01 2550831
ZNR UUUUU ZZH
R 110831Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3249
INFO RUCNCIS/CIS COLLECTIVE 0633
RUEHAST/USOFFICE ALMATY 0718

UNCLAS SECTION 01 OF 02 ASTANA 001724 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV PGOV KZ
SUBJECT:  KAZAKHSTAN - TWO STEPS FORWARD, ONE STEP BACK ON DOING 
BUSINESS 
 
ASTANA 00001724  001.2 OF 002 
 
 
Summary 
------- 
 
1. The 2009 World Bank Doing Business report was published on 
September 10. It ranks Kazakhstan as the 70th out of 181 countries 
regarding the ease of doing business, a 10-place improvement from 
its revised rank of 80th place in the 2008 report. Kazakhstan made 
major gains in two specific Doing Business indicators -- 
"registering property" and "getting credit" -- but took a step 
backwards in several other indicators. 
 
Background 
---------- 
 
2. Published annually by IFC and the World Bank, Doing Business 
assesses the ease of doing business in a country based on 10 
factors: starting a business, dealing with construction permits, 
employing workers, registering property, getting credit, protecting 
investors, paying taxes, trading across borders, enforcing 
contracts, and closing a business.  The report has both rankings and 
absolute values. Rankings are a relative measure: if a country is 
reforming, but its pace of reforms is slower than that of other 
countries, its ranking may still deteriorate despite improvements. 
Absolute values (for example, the number of days or procedures 
required to obtain a construction permit) help provide a more 
objective picture of the situation within a country. 
 
3. Published for the sixth time, the report has become increasingly 
recognized as a tool to compare a country's position in the 
above-mentioned spheres against other countries, as well as against 
its own performance in the past. Moreover, the report helps 
governments set priority areas that need reforms most, and helps 
streamline these reforms along lines of improving specific Doing 
Business indicators. USAID closely looks at the report, since Doing 
Business figures serve as indicators for several USAID projects, 
including BEI and RTLC, and for the U.S.-Kazakhstan Program for 
Economic Development (PED). 
 
2009 Results 
------------ 
 
4. The greatest improvement for Kazakhstan in the 2009 Doing 
Business report was in the "registering property" indicator, with 
Kazakhstan's ranking improving from 77th to 25th place, or by 52 
places.  This improvement was the result of streamlining the 
registration process and reducing fees.  Kazakhstan also showed 
significant improvement in the "getting credit" indicator, with its 
ranking improving from 61st to 43rd place, or by 18 places.  This 
was the result of increased credit bureau coverage and improved 
access to credit information.  The first credit bureau in Kazakhstan 
was created with USAID assistance and continues to be a valuable 
partner for USAID projects in improving access to credit 
information. 
 
5. For Kazakhstan, the 2009 rankings and revised 2008 rankings for 
each Doing Business indicator are as follows: 
 
Doing Business - 2009: 70, 2008: 80, Change: +10 
Starting a Business - 2009: 78, 2008 61, Change: -17 
Construction Permits - 2009: 175, 2008: 176, Change: +1 
Employing Workers - 2009: 29; 2008: 23, Change: -6 
Registering Property - 2009: 25, 2008: 77, Change: +52 
Getting Credit - 2009: 43, 2008: 61, Change: +18 
Protecting Investors - 2009: 53, 2008: 49, Change: -4 
Paying Taxes - 2009: 49, 2008: 47, Change: -2 
Trading Across Borders - 2009: 180, 2008: 181, Change: +1 
Enforcing Contracts - 2009: 28, 2008: 28, Change: 0 
Closing a Business - 2009: 100, 2008: 103, Change: +3 
 
6. Regarding the decline in the "employing workers" indicator, the 
2007 labor law was cited as a negative reform which makes it more 
difficult to fire workers by forcing employers to reassign a worker 
before firing the worker.  While the ranking changes reflect a 
comparison to other countries, changes in absolute values help 
confirm an improvement in the overall business environment in 
Kazakhstan.  For example, the costs, relative to average annual 
income, to start a business and execute a construction project in 
Kazakhstan decreased by 32% over the 2008 Doing Business report. 
 
Additional Reforms 
------------------ 
 
7. Given the World Bank's survey and analysis cycle, additional 
reforms achieved in 2008 are expected to be reflected in future 
reports showing additional improvements in a number of indicators. 
The government of Kazakhstan is expected to meet with an upcoming 
Doing Business mission to the region, with the support of USAID, in 
order to strengthen the relationship between Kazakhstan and the 
Doing Business team.  This should facilitate increased accuracy of 
the Doing Business report and more rapid inclusion of reforms in 
future publications. 
 
ASTANA 00001724  002.2 OF 002 
 
 
 
ORDWAY

Wikileaks

08ASTANA1723, KAZAKHSTAN UNDECIDED ON KOSOVO ICJ REFERRAL

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Reference ID Created Released Classification Origin
08ASTANA1723 2008-09-11 07:04 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0003
OO RUEHWEB

DE RUEHTA #1723 2550704
ZNY CCCCC ZZH
O 110704Z SEP 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC IMMEDIATE 3248

C O N F I D E N T I A L ASTANA 001723 
 
SIPDIS 
 
DEPARTMENT FOR EUR/SCE 
 
E.O. 12958: DECL: 09/11/2018 
TAGS: PREL UNGA KV KZ
SUBJECT: KAZAKHSTAN UNDECIDED ON KOSOVO ICJ REFERRAL 
 
REF: STATE 91908 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
1. (C)  We delivered reftel points on Serbia's proposed 
referral of Kosovo independence to the ICJ to Zhanar 
Kulzhanova, Counselor in the MFA's International 
Organizations Department.  Kulzhanova told us that the GOK 
has not yet developed a position on the issue.  She reminded 
us that Kazakhstan has not recognized Kosovo's independence, 
and said that the GOK "could go either way" on an UNGA 
resolution requesting an ICJ advisory opinion.  Kulzhanova 
said USG views will be taken under consideration and promised 
to keep us updated as the GOK's position develops. 
ORDWAY

Wikileaks

08ASTANA1721, KAZAKHSTAN – IMPACT OF THE GLOBAL CREDIT CRUNCH ON THE

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Reference ID Created Released Classification Origin
08ASTANA1721 2008-09-11 05:39 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0285
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1721/01 2550539
ZNR UUUUU ZZH
R 110539Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3244
INFO RUCNCIS/CIS COLLECTIVE 0631
RUEHAST/USOFFICE ALMATY 0716

UNCLAS SECTION 01 OF 02 ASTANA 001721 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV EAID KZ
SUBJECT:  KAZAKHSTAN - IMPACT OF THE GLOBAL CREDIT CRUNCH ON THE 
MICROCREDIT INDUSTRY 
 
ASTANA 00001721  001.2 OF 002 
 
 
Summary 
-------- 
 
1. Even in resource-rich Kazakhstan, the global credit crunch is 
having a major impact.  This impact is being felt throughout the 
financial system; however, the microcredit industry has been 
surprisingly resilient.  Long a partner in fostering microcredit 
industry growth, USAID support has spanned the spectrum from legal 
reform, to capital investments, training and advocacy, and technical 
assistance to state-established development institutions, including 
the $300 million Enterprise Development Fund (DAMU).  Support has 
helped to lay strong foundations which have enabled micro 
entrepreneurs to contribute to economic diversification.  On 
September 18, the USAID Mission Director will speak at a conference 
in Astana highlighting these gains and future challenges.  End 
Summary. 
 
Creation and Expansion of the Microcredit Industry 
--------------------------------------------- ----- 
 
2. USAID has always seen microfinance as a means of providing 
economic opportunities to the poor through sustainable financial 
services.  Since the mid-1990s in Kazakhstan, it has played a 
pivotal role in the establishment and expansion of the microcredit 
industry.  Initial support included providing capital and technical 
assistance for the establishment of microcredit institutions, 
including KazMicroFinance, the Asia Credit Fund, and the Farmer's 
Fund.  All of these organizations have since matured into profitable 
institutions, with KazMicroFinance alone garnering more than 26,000 
clients and holding an outstanding loan portfolio of $40 million. 
KazMicroFinance was even listed as the 37th best microfinance 
institution in the world by Forbes magazine and is in the process of 
converting to a commercial bank by late 2009. 
 
3. Initially unrecognized by the Kazakhstani government, the 
industry received a boost when the government passed the 
USAID-supported "Law on Microcredit Organizations" in 2003.  The law 
outlined the basic legal framework of the industry by defining two 
types of microfinance institutions: (1) limited liability, 
for-profit partnerships and (2) non-profit, public funds.  The 
microfinance law allows a maximum loan amount of 8 million 
Kazakhstani Tenge (approximately $67,000 USD), though actual loan 
sizes average approximately $2,500. 
 
4. The industry received a second boost when it was successfully 
argued that the industry contributed to the Kazakhstani government's 
policy of economic diversification.  The government has long 
recognized the need to diversify its economy and as early as 1997 
established an $83 million Small Enterprise Fund (SMEF), which was 
tasked with expanding financing to micro, small and medium 
enterprises. In 2005, SMEF began lending to microcredit 
organizations directly and until 2008 its annual financing was 
approximately $15.5 million per annum. 
 
5. In 2004, USAID established the Association of Microfinance 
Organizations of Kazakhstan (AMFOK) which has since garnered 
significant recognition from the government.  AMFOK has played a key 
role in the development and expansion of a number of microcredit 
organizations through training and technical assistance and in 
initiating and passing amendments to the original micro-lending law. 
AMFOK has since grown to comprise more than 70 members with 51,267 
clients and active portfolios totaling $161 million.  It is well on 
its way to complete operational and financial sustainability. 
 
6. In 2003, USAID also set up a regional wholesale lending 
institution, Frontiers, that lends to microfinance organizations to 
increase their liquidity and loan capital.  Frontiers has since 
become fully sustainable (ROE 13%) and maintains an outstanding loan 
portfolio of over $10 million. 
 
The Global Credit Crunch 
------------------------ 
 
7. The onset of the global credit crunch has had a major impact on 
the economy of Kazakhstan. From 2001 to 2007, real GDP growth 
averaged 10 percent annually.  Based on oil sector development that 
was matched by generally prudent macroeconomic policies, structural 
reforms, and increased access to global financial markets, real per 
capita income had doubled since 2000 and social indicators improved. 
 The banking sector played a key role in this rapid growth.  Most 
banks, which account for 80 percent of total financial system 
assets, are still locally and privately owned, although foreign 
participation has increased. The sector is highly concentrated, with 
the five largest banks accounting for 78 percent of market share. 
Banks have been very reliant on external financing, with external 
liabilities making up about 45 percent of their aggregate balance 
sheets. 
 
8. From January 2005 until August 2007, easy access to external 
funding had fueled very rapid domestic credit growth -- an annual 
average growth rate of 70 percent had brought credit to around 75 
 
ASTANA 00001721  002.2 OF 002 
 
 &#x0
00A;percent of GDP. Lending was mainly to the household, trade, and 
construction sectors, while the energy sector does not rely on 
domestic Kazakhstan banks for financing.  Speculative behavior in 
the real estate market was fueled by relatively cheap credit, which 
also fostered the introduction of new financial products.  As in 
other over-inflated property markets, the credit crunch has led to a 
significant decline in construction and property market activity 
which has not only left banks and individuals with overpriced assets 
and dried-up credit lines, but stifled growth, cut employment and 
reduced purchasing power. 
 
9.  The credit crunch also negatively impacted the growth of the 
microcredit industry, with individual micro credit organizations 
facing liquidity crises and with microcredit clients facing the loss 
of profitable opportunities.  Particularly hard hit were the 
numerous small and young microfinance organizations which had 
limited capacity.  Some of these smaller organizations had been 
supported by the Kazakhstani government's credit program, which was 
accused of mismanagement and corruption.  Towards the end of 2007 
there we roughly 1,086 registered microcredit organizations in 
Kazakhstan but approximately half were not active. 
 
Surprisingly Resilient Sector 
----------------------------- 
 
10. Despite the recent challenges faced by the microcredit industry, 
the loan portfolios of AMFOK's members in the first quarter of 2008 
increased by 5.4% compared to a year earlier. 
 
11. Amidst accusations of management and corruption, at the end of 
2006 a new chairman, Amrin Gosman was appointed to head SMEF, which 
was renamed the Enterprise Development Fund (DAMU).  In 2007, DAMU 
was recapitalized at $366 million.  After Gosman participated in a 
USAID tour to study public and private SME support networks in 
Poland (he would also later visit Hungary and the U.S. for this 
purpose), he requested additional technical assistance in assessing 
DAMU's capacity and operations as a government owned, non-banking 
financial institution.  The silver lining of the crisis and 
mismanagement has been the government's recognition that it can not 
pick winners and that it needed to improve operations.  USAID's 
study tours and technical recommendations focused on outsourcing 
direct SME lending to commercial banks and micro-credit 
organizations and on risk management. 
 
12. The openness of DAMU to donor and industry advice, and another 
major plus-up to DAMU capital will result in the outsourcing of $2.2 
billion in SME credit lines via seven intermediary banks for a 
period of between five to seven years.  With respect to microcredit, 
Damu intends to lend between $16-20 million per annum to 
micro-credit organizations during the same period.  In mid 2008 DAMU 
received 45 applications from micro-credit organizations and 
approved half of them.  USAID technical support to DAMU in both the 
areas of financial and business development services will continue 
through a number of USAID activities. 
 
Challenges and Future Direction 
------------------------------- 
 
13. The Microcredit industry still has a long way to go in 
Kazakhstan. Further consolidation, financial products for rural 
areas, and legislation which enables balanced regulation for limited 
savings mobilization are but some of the challenges the industry 
faces.  Despite these challenges the future looks bright.  As USAID 
winds up its support to the sector in 2009, it is leaving behind a 
strong advocacy group (AMFOK), a more professional and market-based 
government counterpart (DAMU), and a second-tier lending institution 
(Frontiers) which will be used to establish a $100 million regional 
agricultural development fund, enabling it to continue to provide 
liquidity far into the future. 
 
14. Through 2009, USAID will provide support to build the capacity 
of AMFOK to ensure its operational and fiscal sustainability.  AMFOK 
will provide ongoing advice and support in maintaining high industry 
standards and in improving the policy, legal, and regulatory 
environment for the microfinance sector.  A joint AMFOK and DAMU 
microfinance conference on September 18 is an indicator of the 
stature that AMFOK has achieved.  Such workshops which bring 
together leading microfinance practitioners, association executives, 
and government regulators and policymakers to analyze the state of 
the industry and share information and best practices are 
invaluable. 
 
ORDWAY 
 
 
 
5

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